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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