Saying average bank base rates are going to be below 5% in the future looks like one of the most reliable forecasts anyone can make, based on the long term trend data.
Saying rates may not be far from zero may be almost as reliable now.
But McCafferty did not, of course, draw the obvious conclusion. The first is that in that case monetary policy has little or no roll to play in the economy.
Why will interest rates be low? Because given the economic conditions it will be our policy that interest rates will be low.
Low interest rates are not a proof that monetary policy has no role, it is a bloody monetary policy.
And, second, that in that case giving any significant role in the management of the economy to a supposedly independent central bank makes no sense at all, because the only instrument they have to use is the interest rate and for all practical purposes it will have no impact on economic management in the foreseeable future.
Would having high interest rates change the economic outcome? Then someone still has to decide what monetary policy is going to be, don’t they?