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Powell says the Federal Reserve is not considering negative interest rates

May 13, 2020


Even as it has pulled out all the policy stops during the coronavirus crisis, Federal Reserve Chairman Jerome Powell said one area it won’t be going is negative interest rates.

“I know there are fans of the policy, but for now it’s not something that we’re considering,” the central bank chief said Wednesday. “We think we have a good toolkit and that’s the one that we will be using.”

The principle parts of the “toolkit” are interest rates, the bond purchases the Fed has been making and what it calls “forward guidance,” or its verbal directions about policy in the future and the impact it should have on economic barometers like unemployment and inflation.

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