This is because either the desired policy rate is sufficiently below the ELB or the central bank has committed to keep 3/5  BIS central bankers' speeches  interest rates unchanged through forward guidance. However, conflicts of objectives between fiscal and monetary policies may arise in the future. The ongoing accumulation of public debt and the large expansion of central banks’ balance sheets increase the likelihood of such conflicts. On the one hand, large fiscal stimuli for too long may lead to concerns about debt sustainability and, via the expectation of future fiscal tightening, offsetting the favorable effects on output and inflation. On the other hand, central banks should keep the risks taken in their balance sheets under control to avoid threatening their own independence. Indeed, low inflation today is not a guarantee that it will remain low forever. They must keep a sound balance sheet with adequate capital in order to keep full control of their monetary stance all along the road. The key question is then how to reconcile the benefits of a mutual reinforcement of monetary policy and fiscal policy in the short-term with the challenges of keeping inflation under control and public debt to sustainable levels in the long-term. There is no magic answer to this question but I will try to sketch here some basic principles that are in my opinion ingredients of a sound policymix recipe: 1. Each authority should be guided by and stick to its mandate.
1 Article 3.3 of the Treaty on the European Union. 2 Article 127.5 of the Treaty on the Functioning of the European Union. 3 The monetary policy strategy review: some preliminary considerations, Speech by Christine Lagarde, President  of the ECB, at the “ECB and Its Watchers XXI”conference, 30 September 2020 4 www.banque-france.fr/sites/default/files/medias/documents/2020.05.25_sep_en_cl.pdf 5  See Blanchard & Summers (2020), Automatic Stabilizers in a Low-Rate Environment, AEA Papers and Proceedings, vol 110, May. 5/5  BIS central bankers' speeches