# Liquidity Trap

*Macro & Economy — Finicade finance glossary*

When interest rates are near zero and cutting them further does nothing — people hoard cash instead of spending. It leaves monetary policy pushing on a string, forcing other tools like QE.

**Also known as:** zero-lower-bound, zero-lower-bound-toolkit

**Related terms:** [Monetary Policy](https://finicade.com/glossary/monetary-policy), [Quantitative Easing](https://finicade.com/glossary/quantitative-easing), [Deflation](https://finicade.com/glossary/deflation)

**Taught in:** Macro & Markets — Monetary Policy: Rules, Targets & the ZLB

Source: https://finicade.com/glossary/liquidity-trap