[slv77]

High interest rates incentivize people to save now to spend more in the future and low interest rates incentivize people to spend now and spend less in the future. Young people tend to be in the spend now camp as they purchase homes, cars and other big ticket items that they will pay with based on increasing incomes. Older people tend to save now so they can purchase what they need in the future when they have declining incomes. The ratio of young to old influence interest rate demand.