Doing so requires raising interest rates further for as long as needed to put inflation back on a sustainable path towards 2%. Monetary-fiscal interaction at the zero lower bound The years before the pandemic were characterised by an environment of persistently low real interest rates and below-target inflation.
Incomplete transmission of monetary policy Despite these successes, more needs to be done to ensure that Indigenous governments, households and businesses have comparable access to financial services. This is important because these barriers to financial markets have other negative effects. For example, they hinder the transmission of monetary policy to the Indigenous economy.