September 1, 2016

IN A DEFLATIONARY EPOCH ARE THEY EVEN NEGATIVE?:

Fed's Fischer Says Negative Rates Seem to Work in Today's World (Jeanna Smialek and Jana Randow, 8/31/16, )


Fischer's comments on negative rates come days after Chair Janet Yellen left the subject out of a speech on the future U.S. monetary policy toolkit, suggesting that they're not an option that's up for discussion at the Fed. Fischer is a former Bank of Israel governor and a prominent figure in international economics, so his remarks constitute an important acceptance that the unconventional and often controversial policy might be working in other jurisdictions.

"We're in a world where they seem to work," Fischer said, noting that while negative rates are "difficult to deal with" for savers, they typically "go along with quite decent equity prices."

Posted by at September 1, 2016 2:40 PM

  

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