During the past six months, global economic uncertainties have intensified, largely as a result of developments in emerging-market economies. The task for the Bank of Canada, as for monetary authorities in other industrial countries, has been twofold: to assess the implications of those developments for domestic economic activity and inflation, and thus for the stance of policy; and to address the volatility and nervousness in financial markets. In our May Monetary Policy Report, we noted that a high degree of uncertainty existed because of the international environment.