When interest rates go down, it means safer investments become less attractive. For example, lets say you have 1 million dollars in the bank account. if the bank pays you 0% then you're not very likely to keep your money there. You're much more likely to put it in the stock market, a hedge fund, a high yield muni bond or anywhere else. What all those "anywhere else" have in common, is that they're all higher risk. So, collectively by reducing interest rates you are incentivizing risky behavior.
And it's not just individual players. Think about all those pension funds and insurance company funds that need to make returns to fund people's retirements. Collectively they have trillions of dollars on the line, and no choice but to invest in increasingly risky funds. Once you understand the connection between low interest rates and risk, as a follow up, watch this: https://www.youtube.com/watch?v=k9_bWbrYPKg Brian Reynolds has a ton of experience working in the pension industry and this is an extremely fascinating interview (though a bit advanced, but you can still understand some of it)
And it's not just individual players. Think about all those pension funds and insurance company funds that need to make returns to fund people's retirements. Collectively they have trillions of dollars on the line, and no choice but to invest in increasingly risky funds. Once you understand the connection between low interest rates and risk, as a follow up, watch this: https://www.youtube.com/watch?v=k9_bWbrYPKg Brian Reynolds has a ton of experience working in the pension industry and this is an extremely fascinating interview (though a bit advanced, but you can still understand some of it)