This brings me to the second part of the answer, based on economics: a fixed interest rate policy would be unsustainable because it would inevitably lead to either an inflationary or a deflationary spiral. 3  This conclusion is well established in the theoretical literature, but it does not require any great familiarity with monetary theory to appreciate how it is arrived at.
Suppose, for example, that a central bank attempted to set the interest rate at a low level which imparted a strong stimulus to demand and 3  The technical way of describing the weakness of permanently fixing the interest rate is to say that it is an unstable rule because it leads to indeterminacy of the price level.