The impact of low interest rates is often to:

Low interest rates typically lower the cost of borrowing, making it more attractive for both individuals and businesses to take out loans. When interest rates are low, the expense associated with borrowing is reduced, which can lead to an increase in consumer spending and business investments. This increased borrowing can stimulate economic growth as it allows individuals to finance large purchases (like homes or vehicles) and enables businesses to invest in expansion, equipment, and research.

In an environment of low interest rates, banks are more likely to lend, and consumers and businesses are more inclined to take on debt. This, in turn, can spur economic activity, as increased borrowing leads to higher consumption and investment overall.

While other factors may influence the overall economic context—such as inflation, savings behavior, or investment strategies—low interest rates generally serve as a catalyst for stimulating borrowing activity.