Well low rates are good for traders. There is too much of supply atm so the rates are very low. But i guess when demand increases and rates shoot up there might be some shortage but it won't last long, market should stabilize it.
It's terrible for traders. Right when you hit buy to jump in on the next rally, there will be no liquidity to lend from. You end up having to pay XXX% (annualized) for a leveraged position which eats into your P/L. It amplifies the time value of your position, immensely. For example, if the market trends sideways for a little bit, you'll be paying out the ear for the time of holding an outrageously expensive loan.
It's a ticking time bomb, BFX really doesn't understand liquidity and the importance of stability in fixed income markets. Things like interest rate risk really shouldn't factor into traders' decisions.