Higher interest rates over recent times would have meant we undershot our inflation and employment goals, have significant weaker activity, and a rising domestic exchange rate – until it was unsustainable. But there are natural limitations to what central banks can achieve with their tools, and if operating alone.
At the same time household savings have declined due to increased borrowing against rising house values. The counterpart to the US current account deficits were surpluses in emerging markets such as China and some oilexporting countries. For the latter group of countries, the surpluses can partly be explained  BIS central bankers’ speeches  1  by an increase in oil prices.