Is the Fed ready for the next recession?
The answer is no.
Extensive research shows that it takes between 300 and 500 basis points of interest rate cuts by the Fed to pull the U.S. economy out of a recession. (One basis point is 1/100th of 1 percentage point, so 500 basis points of rate reduction means the Fed would have to cut rates 5 percentage points.)
Right now the Fed’s target rate for fed funds, the so-called “policy rate,” is 1.75%. How do you cut rates 3–5% when you’re starting at 1.75%? You can’t.
Negative interest rates won’t save the day. Negative rates have been tried in Japan, the eurozone, Sweden and Switzerland, and the evidence is that they don’t work to stimulate the economy.
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DelMarVa's Premier Source for News, Opinion, Analysis, and Human Interest Contact Publisher Joe Albero at alberobutzo@wmconnect.com or 410-430-5349
2 comments:
The Bankers know negative rates don't "help the economy".
They don't care about the economy, if they did, they wouldn't work so hard to destroy economies around the globe.
What they want are monopolies on debt creation - which they have now.
The negative rates are meant so they don't have to pay people to put their money into the banks.
Since people don't want to keep their money in a bank when they earn no interest, the Banks are encouraging the destruction of cash. Again, so they will have a monopoly on EVERYTHING.
The Bankers are the mortal enemy of humanity.
Plain and simple.
If you haven't figured that out yet, then you aren't paying attention.
Yeah and so is Armageddon! Keep talking about it and sooner or later it probably will!
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