[24] Bounded rationality may hence limit the efficacy of policies geared towards boosting inflation expectations, all the more so as new empirical evidence highlights that most households are very hesitant about adjusting their long-term inflation expectations in response to news. [25] None of this is to say that monetary policy is powerless.
However, a number of factors suggest that investment and hiring should pick up in the months ahead. For some time now, the business sector has been meeting a growing final demand without adding capital or employees. Presumably, businesses cannot indefinitely squeeze increasing productivity out of fixed resources and eventually will need to invest and add workers to meet the demand for their output.