"The committee’s view on negative rates really has not changed. This is not something that we’re looking at", Jerome Powell said Wednesday, after regaling America with a truly dour take on the outlook for the world's largest economy absent sufficient fiscal support.
"I know there are fans of the policy, but for now, it’s not something we’re considering", he added. "We think we have a good toolkit, and that’s the one we’ll be using".
When it comes to "fans" of negative rates, Donald Trump can be counted. The president on Tuesday referred to sub-zero policy rates as a "GIFT" (all-caps in the original tweet) and implored the Fed to avail itself of the opportunity to push rates below zero.
Read more: Trump To Powell On Negative Rates: Don’t Look A ‘GIFT’ Horse In The Mouth!
Powell's remarks suggest the Fed will resist the pressure - as long as it can, anyway. His colleagues offered similar push back on Monday and Tuesday.
Market bets on NIRP from the Fed were pressed initially as Powell emphasized structural risks to the economy, but were trimmed once he explicitly addressed the point. Last week, STIRs abruptly began to price in an adventure below zero as early a
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