3 Monetary policy new normal Subdued inflation and low interest rates characterised the macroeconomic environment in recent years. In the US, interest rates stayed at around the zero lower bound for seven years. Currently, the federal funds rate is bound to a target range of 1.75% to 2%.
In the euro area, the deposit facility rate has been zero or even lower since mid-2012, and it will still take some time until we will exceed that level again. Much of the length of this period of ultra-low interest rates has to do with the depth of the slump during the crisis.