Market pricing continues to paint negative Federal Reserve rates beginning in 2021.
Overnight, S&P (and other indices) cranked up the gains. As did gold.
Powell spoke on Wednesday at the Peterson Institute. In brief (this was covered extensively on Wednesday, just in summary):
- wants to use Fed policy tools to the fullest until the recovery is beginning
- but gave a big "No" to negative rates ... "This is not something we are looking at"
But, Powell also:
- sounded very pessimistic on the outlook, comments along the line that the
- recovery may a long time to get momentum behind it, liquidity issues may become solvency issues - these are very damaging both short- and long-term
Meanwhile we have President Trump urging negative rates (and Trump has a history of getting his way with Powell).
So, negative rates, yes or no folks? Comments welcome.
