Low inflation expectations and default premia are often interpreted as a sign that markets are attributing a low probability to the risk that policies may become unsustainable. However, we have seen in the recent past that markets tend to adjust prices in a discontinuous way.
It is already longer than its predecessors, and if we as a community are sensible and do not allow short-term thinking to overcome our long-term interests, it could rival in length the expansions of the 1950s and 1960s. As for monetary policy, we think it can play a very important part in achieving that end.