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Fed Unanimously Expresses Distaste For Trump's Call For Negative Interest Rates

November 25, 2019

President Donald Trump has publicly shared his opinion on interest rates and has been demanding that the Federal Reserve introduce negative interest rates. However, the Federal Reserve is cautioning against the idea, as it could lead to "significant complexity or distortions to the financial system," according to minutes released from the Fed's October meeting.

 

"All participants judged that negative interest rates currently did not appear to be an attractive monetary policy tool in the United States," the minutes said, according to HousingWire.

 

"It was unclear what effects negative rates might have on the willingness of financial intermediaries to lend and on the spending plans of households and businesses."

 

According to the report, negative interest rates have not helped the European Central Bank and that economic growth in the are is likely to dip for 2020.

 

"Under a negative rate policy, banks and other financial institutions have to pay interest for parking excess reserves with the central bank," according to the report.

 

To learn more about the President and the Federal Reserve's battle over the idea of introducing negative interest rates, click on the image above

 

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