These additional factors may further strengthen the bank lending channel of monetary policy. This brief review of the role of banks in monetary policy transmission has highlighted that the balance sheet channel, the bank lending channel, and the risk-taking channel may be relevant in the transmission of the current hiking cycle.
It is possible that the current policy settings will be enough – that we just need to be patient. But it is also possible that the current policy settings will leave us short. Given this, the possibility of lower interest rates remains on the table.