Hurdle to Negative Fed Rates is Political, Not Legal, Study Says
By Tatiana Darie
The U.S. Federal Reserve probably has the legal authority to adopt negative interest rates, although it would face political opposition over deploying such an unconventional monetary tool, according to a study by research firm Federal Financial Analytics Inc. In congressional testimony this month, Fed Chair Janet Yellen said she wasn’t aware of any law that would stop the central bank from imposing negative interest rates, and the idea warranted more study. The option is being aired after it was adopted by some European central banks and the Bank of Japan to spur growth.