Deutsche Bank posits that lower real interest rates reduce households' expected return, thereby prompting them to save more in order to meet their long-term financial goals and forgo spending today.

The team estimates that Fed policy has driven real rates in the U.S. to 2.5 percentage points below their neutral levels, which has resulted in a 0.9 percentage-point rise in the savings rate. Any increase in the savings rate entails an offsetting decrease in the consumption rate, as households refrain from spending that portion of their income, which weighs on current economic activity.''

The funny thing is, increased savings should actually stimulate the financial economy; but in our twisted system, this kind of savings (i.e., withholding consumption by stashing cash in the bank) isn't even needed, because more routinely, investment is generated from credit and monetary expansion. So increased savings is taken as a negative -- a signal that consumers don't want to spend.

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