Negative Interest Rates Will Damage an Already Crippled Economy

The Federal Reserve Bank of St. Louis just published a paper suggesting the Federal Reserve should use negative interest rates to buoy the economy in the wake of the COVID-19 lockdowns. But negative interest rates have never worked before, and it’s foolish to expect them to work now.

In normal times, you expect to receive interest income on a bank deposit. That lets your savings grow. Negative interest rates turn that idea on its head. With an annual interest rate of -1 percent, for example, if you deposit $100 in the bank, a year later your savings will have shrunk

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