Liquidity trap

A liquidity trap is a situation in which interest rates are low and savings rates are high, rendering monetary policy ineffective. In a liquidity trap, consumers choose to avoid bonds and keep their funds in savings because of the prevailing belief that interest rates will soon rise (which would push bond prices down). Because bonds have an inverse relationship to interest rates, many consumers do not want to hold an asset with a price that is expected to decline—Read more at Investopedia. Mitchell, Cory. “Liquidity Trap.” 25 June 2019