5.10.20
Federal Reserve (Fed) officials have decided that they will not likely use negative rates to encourage economic growth during the pandemic after concluding that the costs of doing so outweighed its undefined benefits. The Fed’s decision comes as investors in the futures markets began betting that the Fed’s benchmark federal-funds rate would dip below zero by the end of the year, which would send yields on two-year Treasury securities to a record low. The Fed sees negative rates as a last-ditch effort and are concerned they would have significant negative effects on the banking industry and financial markets
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