The Importance of a Low Inflation Regime

The benefits of an anchored inflation regime are truly enormous. We went from double digit inflation in the 70s down to very, very low inflation in the last many years. The banks could let cycles run much longer because everything was just moving along quite nicely with low inflation. So you can have long expansions, less volatility in terms of cyclical growth. These are just some of the benefits, but they're enormously powerful. But we shouldn't jump to conclusions that it's already a done deal"