How many more signs in the open market do people need to see to realize equilibrium interest rates need to rise to free up the markets? Right now, the low rates are just shifting the excess risk leverage into treasuries creating a pricing bubble there, driving the yields down, and escalating the spread between rates. Rates go up, bank deposits go up, true liquidity goes up, overall market risks adjust and banks will lend. Liquidity needs to decouple from rates, and the Fed is keeping this from happening. Banks will use all the other money they are being provided directly for liquidity, when they let rates go to equilibrium. It would provide more liquidity to all banks through deposits, the fear of bank defaults would drop, and it would free up the overnight markets as well. Protecting Real Estate prices, to support the value of the paper they hold, isn’t going to solve the real liquidity problem. Right now they are just protecting the already dead horse from the Vultures, who provide a beneficial service moving the life / death cycle along fluidly.