Posted on 02/11/2016 9:40:48 AM PST by xzins
As recession fears mount in the U.S., Fed Chair Janet Yellen conceded there's a "chance" of a downturn ahead.
Asked by Republican Sen. Bob Corker whether the monetary policy-making Federal Open Market Committee would consider going to negative interest rates, which would entail charging banks to store reserves at the Fed, Yellen left the door open. She repeated a statement she said Wednesday that the Fed had considered negative rates in 2010 but decided that wouldn't be the best course at that time.
"We wouldn't take those off the table, but we have work to do to judge whether they would be workable here," she said.
Banks currently have $2.27 trillion in reserves at the Fed, compared to the required $117.3 billion required. The Fed pays a 0.5 rate on those deposits.
Toomey also questioned whether a negative IOER rate would end up seeing savers pay a fee to keep money at banks. Yellen said she does not believe that is the case of the European countries where it has been tried.
That makes me feel special, both a recession and a government move that makes me pay to keep my money in a savings account.
Amazing
Cool. Then the banks could pay me to borrow money from them. Awesome.
Ummmm......
negative interest rates, which would entail charging banks to store reserves at the Fed,
Not so much.
The government overspends and then blames us for not paying enough.
Isn’t Obamaland great? :)
I’m betting it organized to benefit them no matter which way you take it.
the eight year dollar run, built on nothing, is coming to an end.
They are also moving to discourage, if not an outright ban the use of cash.
First step to abolishing cash. Then outlawing bartering. Then the mark on the forehead...
if deflationary forces are strong enough, simply cutting the central bank’s interest rate to zero may not be sufficient to stimulate borrowing and lending.
A negative interest rate means the central bank and perhaps private banks will charge negative interest: instead of receiving money on deposits, depositors must pay regularly to keep their money with the bank. This is intended to incentivize banks to lend money more freely and businesses and individuals to invest, lend, and spend money rather than pay a fee to keep it safe.
http://www.investopedia.com/terms/n/negative-interest-rate-policy-nirp.asp
She should be hanging from rope for crimes against humanity.
She and the Fed are engineering a massive strip-mining of wealth and wages from ordinary citizens, to keep the Fed’s member banks afloat, and the massive progressive, expensive US government running.
I want a George Foreman grill. Toasters are so ‘old school’.
:>)
Well, sort of. Think of it this way. Youre being penalized for not spending it to prop up an economy thats going to collapse anyway. Youre just helping them buy some time.
What the media isnt reporting widely is that NIRP arent achieving the goals the movers/shakers wanted. Rather than spending people are continuing to save. Three euro countries have had NIRP for a while and Japan just joined the party.
When NIRP fail here, which they will, prepare for all all out battle to steal your retirement savings.
I am economically ignorant on this. If I have to pay to save money, will the bank pay me for my mortgage?
In your heart of hearts what do you think?
I fear it's coming.
Yeah, charging banks interest on their Fed balances is gonna keep banks afloat. Not.
I look for them to steal anything that isn’t nailed down just about all of the time.
Maybe a “The Fed gave us negative rates, and all I got was this lousy t-shirt” shirt?
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