This is not something that we are projecting, and it is certainly not something that we are advocating, but there is increasing talk among US official about the possibility of a Negative Interest Rate Policy in the United States, most recently by the President of the New York Fed.
With the outlook for the US Economy at least having strong headwinds in the future, it is wise to realize that the Fed just does not have enough “firepower” (just 200 more basis points, compared to a traditional 400 bp’s plus) to get a recessionary economy turned around with traditional Monetary Policy tools.
There is a lot of chatter about Negative Interest Rates in the US, as well as Modern Monetary Policy, which is essentially Quantitative Easing on Steroids.
Therefore, it is good to stay as informed as possible as we continue to venture into “uncharted waters.”
For more information, consider reading "The Disaster of Negative Interest Policy" written by Thorsten Polleit.
Rates continue to work lower, and it is becoming an increasingly challenging environment.
Source: The Wall Street Journal
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