It is also worth noting that some of the largest central banks in the world, namely the U.S. Federal Reserve and the Bank of Japan, adopted numerical inflation objectives, the centerpiece of inflation targeting regimes, in the aftermath of the global financial crisis. 7 It is true, as some have argued, that the attention paid to financial stability under inflation targeting regimes was insufficient.
While these considerations indicate that the current low level of interest rates is not an arbitrary choice of central banks, the risks posed by a protracted, very accommodative monetary policy need to be monitored carefully. And so they are.