Janet Yellen: Negative U.S. Interest Rates Are Possible

Janet Yellen: Negative U.S. Interest Rates Are Possible

Federal Reserve Chair Janet Yellen, did not rule out “negative interest rates”, as a possibility in her Congressional meeting Thursday.

However, if Congress does decide to go in this direction the U.S. would not be alone.

“Five central banks–Denmark, Eurozone, Sweden, Switzerland and Japan–now have negative interest rates.”

When central banks cut interest rates, their goal is to encourage people and businesses to spend their resources.“When people aren’t earning any interest in the bank, they look around for other ways to make money.” “Implementing a negative rate in a technical sense, means someone is actually being charged a penalty to hold money in the bank.”

There remains a mystery over whether negative rates work and how they impact the global markets.

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