The use of negative rates carries too much instability risk, Fed policymakers said
President Donald Trump has extolled negative interest rates on Twitter and in speeches, making clear he wants the Federal Reserve to slash its benchmark rate below zero, a policy it has never used before.
Fed policymakers are unanimous in their distaste for the idea, judging from the minutes released on Wednesday for the Fed’s October meeting. The use of negative rates carries “risks of introducing significant complexity or distortions to the financial system,” according to the minutes.
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