Ha-ha the fed is now asking banks to consider NEGATIVE INTEREST RATES!!!

[S2007S]

To all the fools out there who think there is no such thing as the fed funds rate going NEGATIVE think again...its going to happen in the next 12-18 months....all those rate hikes for 2016 are now off the table. As I have repeated a million times rates are going to stay near 0% for the next decade....the economy can't even handle a .25% interest rate...the feds next move is back to 0% and when the GDP figure starts to fall further they will take rates to NEGATIVE... The fed knows it wants NEGATIVE INTEREST RATES that's why they are preparing now.. This just tells you even more that this entire global economy is worthless....zero growth left and the only way possible to keep it somewhat inflated is with historical low rates and more QE.....




As interest rates turn negative around the world, the Federal Reserve is asking banks to consider the possibility of the same happening in the U.S.

QUICKTAKE Negative Interest Rates

In its annual stress test for 2016, the Fed said it will assess the resilience of big banks to a number of possible situations, including one where the rate on the three-month U.S. Treasury bill stays below zero for a prolonged period.


http://www.bloomberg.com/news/artic...zero-is-bank-stress-fed-wants-to-test-in-2016

 

[destriero]

Then the f*cking idiots probably should not have raised rates.

 

[wabu27]

U.S. is so prideful it will not do negative interest rates..

 

[ETcallhome]

Then the f*cking idiots probably should not have raised rates.

seemed like a good idea at the time. At least now we know how much that 25 basis point chip is worth.

 

[destriero]

Yup, all of six weeks ago.

 

[der_kommissar]

It's crystal clear that asset prices dictate whether or not these wonks raise rates...With S&P above 2100 in early Nov, they felt more confident with a rate raise...Now that the S&P is below 1900, they have to embark on the "open mouth operations" and rely on a few assists from the other CB's to talk the markets off of the ledge.

 

[cdcaveman]

Every rate hike would be so devastating deflationary they won't be able to handle it... They are like a bunch of children that can't keep their handles off the monetary knobs of anti control... Lots of pain now of devastating depression later....

 

[cdcaveman]

One or two hikes at this rate will put us at 1200 on the sp

 

[der_kommissar]

One or two hikes at this rate will put us at 1200 on the sp

and still nowhere near historic norms for interest rates...so even if they followed thru on the 3-4 hikes to get us to 1.00%, like you say it would crush stocks and rates would still be obscenely low...quite a mousetrap that they have built.

 

[EnergyTrader]

Note that the Federal Funds rate has not been below 0.25% in the last several years. It just went up to 0.50% in Dec. The Fed is paying 0.50% on all required AND excess reserves of Banks, which puts a floor on the Federal Funds rate.

Congress needs to outlaw paying any interest on excess reserves and cap the interest rate on required reserves at no more than the 30-day Treasury Bill rate. It was illegal for the Fed to pay any interest on reserves until 2008 when they requested and got permission from Congress to do so as part of the Financial crisis. It makes no sense for the US government to borrow money at 0.50% for money it cannot use (excess reserves cannot be used by the US government) when it could be borrowing using Treasury Bills for much less and get to use the money to cut taxes or build infrastructure.