The transition to low inflation The period when a high inflation economy moves to low inflation is never an easy one. After years of high inflation, the public’s expectations of inflation have been slow to adjust downwards. As a result, they have been less willing to adjust their interest expectations downwards.
Household financial savings are increasing rapidly as a fraction of overall  BIS central bankers’ speeches  5  household savings, but not yet significantly as a fraction of GDP. 5 Some frictions in the interest rate setting market do not also help.