Could Negative Interest Rates in the US Ever Happen?
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Could Negative Interest Rates in the US Ever Happen?

Hardly anybody thinks they’ll take root, pointing to their blah record overseas. Not so fast.

Larry Light
Chief Investment Officer, 2020
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The global economy is awash in negative-yielding debt instruments. Europe and Japan have been living with negative interest rates for a while, but the US Federal Reserve has held off dropping rates below zero. Financial journalist Larry Light explores the efficacy of negative interest rates and whether the United States will be the next to adopt this monetary tool. Financial professionals will find this a concise but thoughtful examination of negative interest rates.

Summary

Negative interest rate policies seek to alter the behavior of savers and consumers.

While the notion of investors eagerly stockpiling debt instruments carrying a negative interest rate seems absurd, the reality is that roughly $13 trillion of these notes, bills and bonds now circulate in the global economy. Some US leaders consider negative interest rates a magic bullet for a stagnant economy.

Yet experts debate the merits of negative rates as an expansionary tool. A negative interest rate inverts the traditional model of spending and saving: Savers pay...

About the Author

Larry Light is the markets editor for Chief Investment Officer magazine. 

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