Trump Hails ‘Gift’ of Negative Rates That Fed Officials Disdain
Trump Says U.S. Deserves ‘Gift’ of Negative Interest Rates
(Bloomberg) -- President Donald Trump said Tuesday the U.S. should receive the “gift” of negative interest rates, after three Federal Reserve officials signaled the central bank is cool to the idea.
Trump has long expressed his desire for the U.S. to pay negative interest on its debt.
But the Federal Reserve, which cut its primary interest rate to near zero in March in the face of the economic crisis prompted by the coronavirus, isn’t anticipating the use of negative rates, central bank officials said before the president’s tweet.
“At best, we’d have to study it more, but I don’t anticipate that being a tool we would be using in the U.S.,” Federal Reserve Bank of Chicago President Charles Evans said from Chicago.
St. Louis Fed President James Bullard repeated his skepticism, noting the strategy had a mixed track record and “it is not a good solution for the U.S.” And the Dallas Fed’s Robert Kaplan said on CNN he’d be against negative rates.
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