Economic activity had come to an abrupt halt in several sectors, triggering sharp increases in (observed and disguised) unemployment, a collapse of business sales and severe liquidity strains, which disproportionately affected small and medium enterprises and brought important financial market segments to the verge of collapse.
This emergence of global low inflation is of course a welcome phenomenon for central banks, for whom price stability is the top priority. At the same time, however, it imposes upon them a new set of tasks.