BloombergThe US and the eurozone face daunting economic challenges in a world of low inflation and interest rates, and central banks alone do not have the tools to cope. “The euro area still has space to do this, but time is not infinite,” he added. She ticked off a number of structural forces holding down interest rates — including an aging population and sluggish productivity — and suggested that they might be around for a while. “This is why the ECB has been consistently calling for fiscal policy to play a stronger role and capitalize” on the low rates, he said. Yellen did, though, express concern about financial stability risks arising out of an extended period of low interest rates.
