- A "big setback" such as a second wave of virus infections could force the
Federal Reserve to reconsidernegative interest rates , $4 strategist Zach Pandl said Thursday. Fed chiefJerome Powell reiterated Wednesday that $4, but "policymakers are going to want to try new things" if the economy tanks further, Pandl told $4.- The strategist warned that pushing rates below zero could do more harm than good, and that additional fiscal relief will likely arrive before the Fed reverses course.
- $4.
The Federal Reserve could reverse its course on negative interest rates if the US economic recovery falters, a $4 strategist said Thursday.
The central bank has already issued relief policy of record scope and size to defend against the coronavirus pandemic, but chief Jerome Powell reiterated Wednesday that negative rates $4. Where other nations have either implemented such policy or appeared open to doing so, Powell's stance has held strong.
Zach Pandl, Goldman's co-head of global foreign exchange, rates, and emerging
"If the economy has another big setback ... where you have a second wave of infections and it would really take the recovery off course, then I do think that that opens up a possibility of a range of additional actions," Pandl told $4 "Street Signs Asia."
Additional fiscal aid from Congress will likely arrive before the Fed takes any additional action, Pandl added, and even then, negative rates serve as a last resort. Cutting the
"Policymakers are going to want to try new things if the economy is really struggling for a period of time," the strategist said. "So in that scenario, perhaps they can consider it; otherwise I think it's pretty low probability at this point."
$4 analysts made similar claims on Tuesday, warning that any immediate benefits gained from negative rates could quickly give way to long-term dislocations. The bank said it views a negative US rate as "$4," and cautioned that even "mildly negative" rates could bring a net negative to the US economy in as little as two years.
Still, the prospect of negative US rates isn't without its fans. President Donald Trump $4 on Tuesday, calling negative interest rates a "gift" to participating countries and urging the US to adopt them.
Now read more markets coverage from Markets Insider and Business Insider:
Read the original article on $4