Should the crisis the Fed is ready to negative interest rates?
fed officials now may look at negative interest rates to cope with the next recession. During the financial crisis in 2009-2010, they rejected that option.
New York Fed President William Dudley told CNBC that Saturday: "in some of the European experience shows that maybe we could use a negative interest rate, the price is not as high as expected,. "
during the financial crisis, Ben Bernanke, Chairman of the Federal Reserve (Ben Bernanke) has considered using a negative interest rate, but ultimately rejected the idea.
Dudley said: "we have decided, even in the worst economic performance, very far from our goal, not to use negative interest rates. Because we are worried that negative interest rates more harm than good. "
Ben Bernanke told Bloomberg radio last week that he did not introduce negative interest rates, because he was" afraid of "zero negative impact on money market funds--money market funds may not be able to recover management costs may no longer be running the federal funds market.
but European action in the past few years to change his mind. In Europe, the European Central Bank, Switzerland's Central Bank, and Denmark's Central Bank and Sweden's Central Bank imposed negative interest rates.
he said: "we are now seeing in the past few years, negative interest rates has been successfully implemented in some European countries. So I think fed negative interest rates will also be considered in the future. "However, Bernanke said that negative interest rates would not be a" panacea ", but additional support.
in fact, released last month, the Federal Reserve Bank of Minneapolis President Narayana Kocherlakota path of interest rate forecasts, expects the Federal Reserve will introduce negative interest rates.
Kocherlakota said he was willing to push down interest rates and make the labour market. He said, stalled after a strong performance in the labour market in 2014.
Miles Kimball, an economics professor at the University of Michigan told MarketWatch that, despite the negative feeling a bit strange, but no different than the usual cut. He pointed out that, to make the negative interest rates have a big effect, a country must cut interest rates on the notes.
for example, a 100-dollar bill in the Bank, over a period of time will become a $ 98. As a result of this controversial character, will not be the world's first large scale attempt to negative interest rates the Federal Reserve Central Bank.
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