An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Tuesday, February 2, 2016
Fed Wants to Test How Banks Would Handle Negative Rates
OMG Ignacio might have been right!!! S_C_A_R_E_E_E_Y !!!
"CB's going NIRP is admission that QE doesn't work IMO."
And in a little while when neg interest doesn't "work" we'll here some CB type lamenting " Well we GAVE them money with QE and they didn't lend it, then we took it away with neg interest and they didn't lend it, what the hell else can we do?!!" It'll never occur to a banker that running things through the loan channel won't get it done.
Translating: "We want to test how the banks are going to pass this tax on their users".
ReplyDeleteIf it's like -0.1% it's not going to have a big policy impact, and will be passed through dubious fees and crap like that.
CB's going NIRP is admission that QE doesn't work IMO.
"CB's going NIRP is admission that QE doesn't work IMO."
ReplyDeleteAnd in a little while when neg interest doesn't "work" we'll here some CB type lamenting " Well we GAVE them money with QE and they didn't lend it, then we took it away with neg interest and they didn't lend it, what the hell else can we do?!!" It'll never occur to a banker that running things through the loan channel won't get it done.