M1 = cash/cash equivalents M2 = M1 + short term deposits M3 = M2 + long term deposits M1 + M2 directly influence inflation - this is the money in circulati

M1 = cash/cash equivalents M2 = M1 + short term deposits M3 = M2 + long term deposits M1 + M2 directly influence inflation - this is the money in circulation, greasing the wheels of the economy. QE increased the monetary base by creating creating bank reserves (M3 long term deposits), re-capitalizing banks and companies after the financial crisis triggered collection chains many , giving them a clean sheet to borrow/loan again and make good on prior obligations (the ones that hadn't exploded). In order for QE to affect inflation, banks would have to loan out these reserves, converting M3 money into M1/M2 - currency in circulation. Banks only loaned out a fraction of the $4T they were given by the Fed. The whole story is a global lack of demand in developed countries for loans/capital to help businesses invest. Many companies aren't buying new machines (what would they buy?), and they aren't hiring new skilled workers (what skills do they need with no new machines?) - large contributing factor to wage stagnation. Instead they are cutting costs - outsourcing departments, renting server time, looking to ML/AI to reduce reliance on costly humans with stagnating skill sets. Interest rates are the cost of borrowing money. Interest rates are low because the demand for money and investment capital is low. There's a large supply of money and a decreasing amount of safe, productive places to invest it.