We must not fall into the ‘vaccination trap’, where, for example, people observe that outbreaks of diseases are less frequent, and hence conclude there is less reason for continued vaccination. Monetary policy has and remains effective when it comes to determining aggregate consumer price inflation.
Recently, in this restored low inflation environment, central banks across the world have faced a new challenge – inflation that is too low, and running consistently below inflation targets. This has prompted the need to reduce policy rates so as to stimulate spending and demand.