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3 Larry Summers in particular warned that the Federal Reserve’s scope to cut interest rates would be too limited  to effectively deal with a recession, see for instance Summers (2016). 4 See, for instance, Lundvall (2020) for a review of the factors behind the fall in real interest rates. 2 [15]  What does an inflation forecast below the target entail? So how should one interpret the fact that the Riksbank is forecasting an inflation rate below the target? One interpretation has been that “the Riksbank has abandoned the inflation target”. If this merely means that we accept that inflation will not quite reach 2 per cent within the coming years, then it is of course true — this is after all what we are forecasting. However, I want to make it clear that it is certainly not true that we have abandoned the target in a general sense and are focusing on something else. What worries me somewhat is that in some quarters the view seems to be that the inflation target has become obsolete. The argument is that the inflation target was useful for bringing down inflation from the overly high levels it was fluctuating around earlier, but once we attained a low inflation rate, the target has no further purpose and might as well be abandoned. However, the purpose of an inflation target is not just to prevent high inflation, but also to ensure that inflation does not become too low.