Because businesses and households knew that central banks were always subject to this temptation, they would assume that central banks might try to trick them (even when no monetary policy easing was being planned) and would raise their inflation expectations in anticipation.
Today I want to talk about some important macroeconomic and financial developments around the world. Inflation rates and interest rates are at historically low levels, and yield curves are relatively flat nearly everywhere. In addition, until recently, many emergingmarket countries simply did not have yield curves because there was effectively no market for debt issued in the domestic currency beyond a very short term.