Over the next couple of years, there are reasons to expect energy prices and the dollar to eventually stabilize, output to increase at around the moderate pace it has averaged over the recovery thus far, foreign growth to recover somewhat, the U.S. labor market to improve further, and inflation to move toward our 2 percent target.
Translating this to the current context, my main takeaway is that as long as inflation remains subdued, central banks are likely to maintain an ample degree of monetary accommodation. But the longer this accommodation is maintained, the more pressure will mount on financial regulators and supervisors to be able to preserve financial stability. 5.