We provide a model connecting monetary policy, credit creation, and nancial stability. Once debt levels in the economy are high, the central bank has incentives to cut the interest rate to preserve nancial stability. By undermining repayment incentives, however, the interest rate cut drags the debt overhang into the future. We show this feedback e ect may expose the economy to self-ful lling dynamics: Interest rate expectations may fall, pushing the economy in an equilibrium with low interest rates and even more debt. Anchoring interest rate expectations, and to a lesser extent, leaning against the wind, are key to avoid that a high debt economy becomes addicted to low interest rates.