Short-term Interest rates are basically ZERO!

Two graphs below show that interest rates are effectively zero. (The link is to the 3 month T-bill - St. Louis Fed.)
The first graph shows historical data back to the Great Depression whereas in the second Fed Funds were not yet traded.

 

You can see from the above that we are getting VERY close to similar territory as during the Great Depression.



Notice the same above, that except for during Greenspan's era of low rates, there has not been a time that short-term interest rates have been this low since July 1958.  July of 1961, the federal funds rate was 1.17% on Oct. 1, 2008 it was at 0.97%.  Today the 3 month U.S. Treasury Bill yield is 0.01%, according to Bloomberg.com.  The Fed Funds rate hasn't been above 0.5% all month of November according to the Federal Reserve Bank of New York (click on the link) and was 0.23% at the beginning of the month!!

WHY is the rate so low?  Because of flight to safety!  EVERYONE wants to own the safest security available: U.S. Treasury Bills!  Demand outstrips Supply - that is more quantity demanded than there is available, then the price skyrockets!!  (The interest rate on Bonds and Bills is inversely related to the price, so the interest rate goes to zero.)
 

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