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The probability of negative U.S. rates is on the rise

Section: Daily Dispatches

By Alexandra Scaggs
Bloomberg News
Monday, February 8, 2016

Global central banks have opened the door to negative U.S. interest rates, in Wall Street's view.

After the Bank of Japan cut some rates below zero last month to spur growth and inflation, strategists are weighing the Federal Reserve's options in case of a crisis. If the world's biggest economy weakens enough that traditional policy measures don't help, the Fed may consider pushing rates below zero, according to Bank of America Corp. and JPMorgan Chase & Co.

That step would broaden the Fed's toolkit beyond what was available during the financial crisis, when it slashed its overnight benchmark near zero and bought bonds to stimulate the economy. In 2012, New York Fed researchers said negative rates could prompt individuals to avoid depositing money in banks, potentially weakening the financial system. ...

... For the remainder of the report:

http://www.bloomberg.com/news/articles/2016-02-08/negative-rates-seen-as...



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