President Donald Trump on Wednesday called for the Federal Reserve to engineer interest rates to zero “or less."
President Donald Trump on Wednesday called for the Federal Reserve to engineer interest rates to zero “or less,” in a new appeal for negative yields that he believes would help the U.S. curb its borrowing costs and stimulate growth.
The concept of negative rates is attractive in theory, but economists say the effects are far less appealing in reality. While it makes the risk of default virtually nil, negative-yielding global debt —currently estimated at $16 trillion — is bad for savers and erodes bank profitability. However, “the Fed’s lukewarm appetite for negative rates is partly because officials know that it could cause outrage among savers and drag the central bank into a political maelstrom,” Ashworth added.
The bank added that “the risk is that...yields continue their race to the bottom, inflating a bond-market bubble that poses yet another risk to the global economy.” “If you frame the argument along these lines, you can see why in a low demand environment that low and even negative yields may be needed to support growth. There is nothing magically different about negative nominal yields,” Memani added.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
CNN's latest poll on President Donald TrumpPresident Trump’s current approval rate is at 39% — the lowest it's been since January. CNN’s David Chalian breaks down CNN's latest poll on how Americans feel about Trump just 14 months before he faces re-election.
Read more »
Trashing Fed 'Boneheads,' Trump calls for central bank to cut interest rates to 'ZERO'Trump called on the Federal Reserve to slash U.S. interest rates “down to ZERO,” calling chairman Jerome Powell and other leaders of the U.S. central bank “Boneheads”
Read more »
Trump Says Fed Should Reduce Rates to ‘Zero, or Less’President Trump renewed his call for lower interest rates and his criticism of the Federal Reserve Wednesday, saying on Twitter that the Fed should reduce rates to “ZERO, or less.”
Read more »
As 9/11 dawns, Trump blasts Fed members as 'boneheads'President Donald Trump says the U.S. is missing out economically because "Boneheads" at the Federal Reserve won&39;t lower interest rates at his insistence. The Fed is meeting next week and is expected to trim its benchmark rate by another quarter point after cutting the rate for the first
Read more »
Former Fed Vice Chair Kohn backs rate cut, rejects Dudley suggestion to foil TrumpIn a CNBC interview, Kohn indicated he believes the Fed will follow market expectations and lower its benchmark overnight lending rate by 25 basis points at its Sept. 17-18 meeting.
Read more »
Donald Trump is Now Feuding With Chrissy Teigen and John Legend???
Read more »