WSJ: Fed’s Dislike of Negative Interest Rates and the Limits of Monetary Policy

[Editor’s Note: NO FED EXIT. It’s like  trying to push a string.   Forcing investors out the yield curve and up the risk ladder searching for anemic yields that look attractive relatively speaking.  All good intentions aside, it’s coercion at best and perhaps financial fascism  on the eve of the Econolypse.  Central bankers  need some better ideas that don’t  make matters worse.  The words “experimental” and “central banking” don’t belong in the same sentence or paragraph.  As the rest of the world diddles around with negative interest rates at least the Fed has a distaste for such “stupid stuff”]

“I’m treating [negative rates] as an experiment that we have the luxury to watch from a distance,” Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said in an interview at the Fed’s annual Jackson Hole conference in the Wyoming mountains.

JACKSON HOLE, Wyo.—Federal Reserve officials are turning a cold shoulder to a controversial idea being tried in Japan and much of Europe to boost anemic economies: negative interest rates.

Fed officials don’t think negative rates are needed in the U.S. because the economy and job market are improving, and they are hoping they will never have to use them in the future given their uncertainty about whether the policy works.

Fed Chairwoman Janet Yellen didn’t even mention the idea in a discussion of the Fed’s options for the economy should recession hit the U.S., and other officials speaking on the sidelines of the Fed’s annual retreat here over the weekend made clear it is an approach they would like to avoid.

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