[sharkweek]

Here's one thing I don't get, pardon my fundamental lack of understanding of macroeconomics here.

How is there so much liquidity when fed rates are zero?

[phdp]

Where else are you going to stash your cash? The likelihood of you losing it when your bank goes under is perceived to be higher than the US government defaulting on their debt obligations. US treasuries are the least risky assets out there, even more so that your bank account deposits for large amounts of cash.

[erichurkman]

For lenders, low rates make it easy to borrow money to in turn lend to consumers. As the rate increases, lenders will pass the higher rate along to consumers, which in turn leads to lower borrowing by consumers due to higher rates.

[babuskov]

All the people/organizations that have extra money are incentivized to spend it instead of keeping it in banks as savings.