<p>The money is not going anywhere. In fact, it never even "left the building". The banks simply increased their <a href="https://research.stlouisfed.org/fred2/series/WRESBAL/" rel="nofollow noreferrer">reserve balances with the Federal Reserve</a>, mainly because the Fed began paying interest on reserves in October 2008.</p>

<p><a href="https://i.sstatic.net/SW1qL.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/SW1qL.png" alt="Reserve Balances with Federal Reserve Banks"></a></p>

CC BY-SA 3.0
2015-08-26T14:52:14.297Z
The Fed's payment of 0.25% interest on excess reserves does not explain (at least, not by itself) why banks are not engaging in more lending. There's a good explainer from FRBNY on this: http://libertystreeteconomics.newyorkfed.org/2012/08/interest-on-excess-reserves-and-cash-parked-at-the-fed.html
dismalscience
CC BY-SA 3.0
2015-08-26T11:45:08.137Z
2015-08-26T11:45:08.137Z
suriv
<p>Question is basically in the title. With interest rates so low for such a long period of time, I wonder where are that injected cash has gone? </p>

<p>I realize that the economy has definetly grown quite consistently for years now, but the middling growth and simulatenous near-zero interest rates would seem to indicate that the economic climate is <strong>so</strong> bad in the country that we basically have to ignite a nuclear bomb to boil a pot of water. </p>

<p>Is that the case? It doesn't seem so, and it seems worrying that maybe this cash from monetary policy is somehow disappearing into thin air as we create it or disappearing somewhere problematic</p>

CC BY-SA 3.0
2015-08-26T12:43:51.077Z
Some of the money went to emerging economies (and now is coming back). But most is, yes, just remains in the banks.
Anton Tarasenko
<gdp><inflation><interest-rate>
With interest rates and inflation in the U.S. low and growth moderate, where is the money going?
user38869
# With interest rates and inflation in the U.S. low and growth moderate, where is the money going?

(Asked by: username_0 on 2015-08-25)

Question is basically in the title. With interest rates so low for such a long period of time, I wonder where are that injected cash has gone?

I realize that the economy has definetly grown quite consistently for years now, but the middling growth and simulatenous near-zero interest rates would seem to indicate that the economic climate is **so** bad in the country that we basically have to ignite a nuclear bomb to boil a pot of water.

Is that the case? It doesn't seem so, and it seems worrying that maybe this cash from monetary policy is somehow disappearing into thin air as we create it or disappearing somewhere problematic

**Tags:** gdp, inflation, interest-rate

> **Comments:**
> **username_1**: Some of the money went to emerging economies (and now is coming back). But most is, yes, just remains in the banks.  

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## 1 answers

### Answer by username_2 on 2015-08-26. Score: 3 | Accepted answer

The money is not going anywhere. In fact, it never even "left the building". The banks simply increased their [reserve balances with the Federal Reserve](https://research.stlouisfed.org/fred2/series/WRESBAL/), mainly because the Fed began paying interest on reserves in October 2008.

[![Reserve Balances with Federal Reserve Banks](https://i.sstatic.net/SW1qL.png)](https://i.sstatic.net/SW1qL.png)

> **Comments:**
> **username_3**: The Fed's payment of 0.25% interest on excess reserves does not explain (at least, not by itself) why banks are not engaging in more lending. There's a good explainer from FRBNY on this: http://libertystreeteconomics.newyorkfed.org/2012/08/interest-on-excess-reserves-and-cash-parked-at-the-fed.html  

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