Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open.

Why can't the Fed lower interest rates below zero?
If the Federal Reserve were to pay banks to hold money, they would need to get the money from somewhere to do so.  They would have three options: Go to Congress, and request and authorization of funds. As an quasi-independent entity, however, it would be both highly unorthodox for an institution to diminish its own authority by requesting funding, and politically difficult for the Congress to appropriate it. Transfer held-assets  After QE & QE2, the Fed is now the holder of several assets (mortgages and the like) that are already unorthodox for it to hold. It acquired these assets in the first place to soak up excess demand.  If these assets were transferred back to banks, it would have exactly the opposite effect - increasing supply and further suppressing the value of the assets they would be trying to shore up by lowering the interest rate. "Print money"  The fed could raise the money supply by issuing new bonds. This is inherently inflationary, and while pretty much everyone agrees this isn't bad in the short run, there is already widespread fear that in the long run, QE by itself is going to unleash massive inflation once growth returns anyway.  To keep "pushing on this string" would only excerabate these fears, and quite likely turn it into a self-fufilling prophecy. In short, the Fed "could" pay banks to hold money, but the political and economic consequences of raising the needed funds to do so would all undermine the institution or the desired effect.