JANET YELLEN: I won’t completely rule out negative interest rates

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WASHINGTON, DC - DECEMBER 16: Federal Reserve Bank Chair Janet Yellen holds a news conference where she announced that the Fed will raise its benchmark interest rate for the first time since 2008 at the bank's Wilson Conference Center December 16, 2015 in Washington, DC. With unemployment at 5-percent and the economy showing signs of strength, the Fed raised the interest rate a quarter of a percentage point and many experts believe the interest rate on short-term loans could go as high as one percent by the end of 2016. (Photo by Chip Somodevilla/Getty Images) Federal Reserve Bank Chair Janet Yellen


Federal Reserve Chair Janet Yellen will not rule out the Fed using negative interest rates.

In response to a question submitted by Rep. Brad Sherman (R-CA) as to what the Fed plans to do in the event of another economic downturn, Yellen said negative rates are not completely off the table.

“Negative interest rates are a tool employed by countries in Europe and elsewhere,” Yellen said.

“By some accounts, these policies appear to have provided additional policy accommodation. As I have noted previously, we certainly are trying to learn as much as we can from the experience of other countries. That said, while I would not completely rule out the use of negative interest rates in some future very adverse scenario, policymakers would need to consider a wide range of issues before employing this tool in the United States, including the potential for…

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