The Fed seems to be trying to pump up liquidity throughout the US economy. But it also seems to be working against itself by (now) paying banks interest on their reserve deposits at the Fed. As The Wall Street Examiner says,
The Fed expanded its balance sheet in a major way this week, but a look into the details reveals that the expansion was apparently funded once again by the growth of reserve deposits not related to the Fed’s lending programs. Cash is coming in to the Fed’s deposit accounts faster than it can push it back out into the market. [emphasis added]
That's a succinct way of putting what Woodward and Hall say:
... the Fed pays 1 percent interest on reserves, which is above the rates that banks can obtain from other similarly safe short-term investments. An expansion of reserves leaves banks with more of an asset they crave because banks prefer reserves at 1 percent to loans at a higher rate; it does not set in motion any process that would result in expanded lending and lower rates for business and consumer borrowers. For reasons we are unable to explain, the Fed raised the rate it pays on reserves recently. The standard analysis of the payment of interest on reserves by central banks makes it clear that increases in the attractiveness of reserves are contractionary. Because the Fed has also increased the quantity of reserves enormously over the same period, we are not saying that the net effect was contractionary, only that the increase in the reserve interest rate went in the wrong direction. (We should add, but only in parentheses, that we support paying interest on reserves at a rate somewhat below other safe rates as a general principle of central banking in normal times.)
Although we believe that restoring the Fed’s interest rate paid on reserves to its traditional level of zero would be a good idea as a temporary stimulus, we do not believe that it would have much expansionary effect in an economy where safe short-term rates are already very close to zero.
I really do not agree with this last part. If the Fed stopped paying 1% on reserves, commercial banks would be more likely to lend more to other borrowers.