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Fed stress-tests negative interest rate idea
Reuters via CNBC ^ | Feb. 2, 2016 | Richard Beales

Posted on 02/02/2016 8:53:37 PM PST by Leaning Right

The Federal Reserve started raising official interest rates in December. But in the stress tests that large U.S. banks have to undergo, the central bank is hypothesizing that short-term Treasury yields could drop below zero. The European Central Bank and, since Friday, the Bank of Japan are trying it with policy benchmarks. Though negative U.S. interest rates are for now only in the Fed's worst-case scenario, they are becoming a plausible downturn assumption.

(Excerpt) Read more at cnbc.com ...


TOPICS: Business/Economy; Government
KEYWORDS: bigbanks; fed; interestrates; negativerates; nirp
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To: Leaning Right
Issue Treasury bonds that don't pay the holder, but instead require the holder to pay the Treasury.

What would be the tax consequences of such a bond?

21 posted on 02/03/2016 5:09:58 AM PST by Pearls Before Swine
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