The head of the Federal Reserve, Ms. Janet Yellen has again discussed negative interest rates and has again managed to avoid any commitment on her intentions.
Online PR News – 13-May-2016 – Toronto, Ontario – Baumann Group
Janet Yellen Shares Her Thoughts on Negative Interest Rates – 13th May 2016
The head of the Federal Reserve, Ms. Janet Yellen has again discussed negative interest rates and has again managed to avoid any commitment on her intentions for the Feds possible next rate hike.
Answering a question posed by a Washington Senate member Ms. Yellen again reiterated the same stance as in March and April, that “Negative interest rates are a tool employed by countries in Europe and elsewhere.”
This is exactly what she has said in one way or another for the last two months.
As analysts and traders try to work out when the Fed will raise interest rates there is now a new concern about their thoughts on the possibility of turning to negative interest rates to spur the economy further.
Currently the Federal reserve says it is watching and learning from both the ECB and Bank of Japan about how effective negative interest rates are and who long it takes for them to help turn economies around.
One of the key issues is that on paper, QE works yet in reality it doesn’t. A comment made famous by Ben Bernanke.
There is also the matter of legality. The Fed has been fairly standoffish when asked about the topic as there is an uncertainty about the legalities of the bank making rates negative. This has been raised by several Senate members over the last few months.
What can be expected is another will they won’t they run up to the next Fed meeting, scheduled for early June.
US Index Closes 12th May:
S&P – 2,064.11 (-0.02%)
Dow – 17,720.50 (+0.05%)
NASDAQ – 4,737.33 (-0.49%)
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