Yellen Says Fed Evaluating Possibility Of Negative Rates

Janet Yellen
Federal Reserve Chair Janet Yellen said the Fed was taking another look at negative interest rates as a potential policy tool if the US economy faltered, after central banks in Europe were able to drive borrowing costs below zero. “We had previously considered them and decided that they would not work well to foster accommodation back in 2010,” Yellen said Thursday, answering questions during a second day of testimony before Congress. “In light of the experience of European countries and others that have gone to negative rates, we’re taking a look at them again because we would want to be prepared in the event that we needed to add accommodation.” Yellen’s comments shed a bit more light on the state of the internal debate at the Fed than her remarks on Wednesday before the House Financial Services Committee.

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