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Will negative rates in Europe, Japan influence Fed’s monetary policy?
By Blu Putnam, Chief Economist and Erik Norland, Senior Economist, CME Group
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Not the Gift That Keeps on Giving
- Negative rates in Europe, Japan have not spurred growth as intended
- They also failed to boost inflation to levels targeted by central banks
- In some cases, negative rates inadvertently strengthened currencies
- Eurozone, Japan, Sweden, Switzerland have negative rates in place
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An Option in the Fed’s Playbook?
- Europe, Japan banking on negative rates to bolster growth
- Critics say the measure is a tax that weakens lending, hurts economy
- European banks are scaling back; German, Japanese growth lackluster
- Do negative rates signal central banks’ pessimism about economy?
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