Still, a period of low rates for a long time could present significant challenges for monetary policy. It could also put pressure on the business models of some financial institutions.
Ultimately, the only way to get sustainably higher interest rates is to improve the broader environment for growth, by adopting policies designed to increase productivity and potential output over the long term--policies that are mainly outside the scope of our work at the Federal Reserve. 13  12 13  See Greenwood and Hanson (2013). See Powell (2016) and Yellen (2016).