Yellen says negative rates not off the table
- Thread starter drcha
- Start date
Yea...that is NOT at all what she said. Maybe you have very selective (or wishful) hearing....
But you should listen more closely as there is a -Gap- between what is said and what You here
But you should listen more closely as there is a -Gap- between what is said and what You here
Such as your post? Yellen said “In light of the experience of European countries and others that have gone to negative rates, we’re taking a look at them again because we would want to be prepared in the event that we needed to add accommodation.”
So yes, this thread is 100% correct. Maybe you're reading something into that's not there...but again, that's your problem.
She also said...
"I am not aware of anything that would prevent us from doing it, but I’m saying we have not fully investigated the legal issues -- that still needs to be done."
"It isn’t just a question of legal authority," Yellen said Wednesday. "It’s also a question of, could the plumbing of the payment system in the United States handle it? Is our institutional structure of our money markets compatible with it? We’ve not determined that."
So.... you guys believe that it's "not off the table"?
Sure, I guess lawyers in Washington analyzing the legal issues - and the analysis of the entire financial system in the US to determine if it's even possible - would be wrapped up pretty quickly. Sure. Right around the corner...
I can tell you for a fact that it has NOT been started in any form right now. It's part of the stress testing scenarios for certain institutions, but there is no effort underway to task the lawyers or the systems people.
The Fed would have to increase the rate they're paying on reserves for the banks to even begin to agree on negative rates.
Off topic but if Grandma dies, is there a line of succession?
Off topic but if Grandma dies, is there a line of succession?
The discussion is not about whether there will ever really be negative rates, but only illustrates (for the market) that the Fed does not consider them an impossibility. On the first day of testimony, she made the statement quoted above by ktm. However, on the second day (today), her language was even more open to this possibility. Whether we ever get there or not is beside the point.