Nominal interest rates in many advanced economies have been low for more than a decade. This column presents evidence that monetary transmission to economic activity is substantially weaker when nominal interest rates fall to very low levels, and that the strength of transmission tends to wane the longer interest rates stay low. This suggests that the observed flattening of the Phillips curve has gone hand in hand with a corresponding steepening of the IS curve. If so, monetary policy trade-offs have become more challenging.