A Inflation is low. So are interest rates. More than $3 trillion of Covid-19 relief spending in 2020 apparently had no negative macroeconomic consequences. So why are a few top economists suddenly worried about the size of the federal budget deficit? Perhaps because they fear a policy regime change. When most people hear the phrase “regime change,” they think of war. But in macroeconomics, a regime change means that there’s been a shift in the rules by which policymakers make policy. If the Federal Reserve decides that it’s going to cut interest rates because the economy is bad, that’s just business as usual; It’s following the typical rule. But if it decides that the costs of low rates are lower than it thought, and therefore that interest rates should be maintained at a lower level in general, that’s a regime change.