As the economy craters, here’s a look at what cutting interest rates below zero would mean for everyday Americans.
It’s hard to imagine being paid to borrow money or penalized for saving. But the economic shock from Covid-19 may call for drastic measures.
Up until this point, the Federal Reserve has never brought its benchmark rate into negative territory and, according to Federal Reserve Chairman Jerome Powell, the Fed is not considering going to negative interest rates now.
« The committee’s view on negative rates really has not changed, » Powell said Wednesday. « This is not something that we’re looking at. »
Yet, « on some level, negative interest rates are inevitable in the U. S., » said Greg McBride, chief financial analyst at Bankrate.com. « It’s just a matter of when. »
More from Personal Finance:Card issuers are cutting credit limits without warningHow to cope with the coronavirus-related money stressorsThese are the best and worst ways to borrow money President Donald Trump was advocating for negative interest rates well before the coronavirus pandemic brought the economy to a standstill, arguing that erasing borrowing costs would spur economic growth.
