Fed Research Considers Negative Interest Rates Effective Policy Tool

A research paper published by the Federal Reserve Bank of San Francisco shows how negative interest rates could become an important policy tool for fighting future economic downturns. The paper examines the market response to the introduction of negative interest rates by five major central banks.

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Fed Studies Negative Rates as Important Policy Tool

The Federal Reserve Bank of San Francisco published a research paper last week exploring the effects of central banks introducing negative interest rates. The paper, entitled “Yield Curve Responses to Introducing Negative Policy Rates,” is authored by Jens H.E. Christensen, a research advisor in the Economic Research Department of the Federal Reserve Bank of San Francisco. This department conducts research on a wide range of topics in support of the Federal Reserve Bank’s policy and public outreach functions.

“Given the low level of interest rates in…