In CBS 60 Minutes, Fed Chair Jerome Powell reiterated that the central bank is not considering negative interest rates. He said, “I continue to think, and my colleagues on the Federal Open Market Committee continue to think, that negative interest rates is probably not an appropriate or useful policy for us here in the United States.”
“There’s no clear finding that it actually does support economic activity on net, and it introduces distortions into the financial system, which I think offset that,” Powell said. “There’re plenty of people who think negative interest rates are a good policy. But we don’t really think so at the Federal Reserve.” “There’s a lot more we can do. We’ve done what we can as we go. But I will say that we’re not out of ammunition by a long shot.”
On the economy, Powell said, “assuming there’s not a second wave of the coronavirus, I think you’ll see the economy recover steadily through the second half of this year”. However, “for the economy to fully recover people will have to be fully confident, and that may have to await the arrival of a vaccine,” he added.
