Setting interest rates below zero would punish banks for leaving excess cash with the central bank. The hope is to encourage lending, in turn boosting business investment and consumer spending.
NEW YORK: The fed funds futures market is pricing in negative U.S. interest rates next year, a scenario the Federal Reserve has said it wants to avoid as many doubt that it would be an effective tool to stimulate growth.
Setting interest rates below zero would punish banks for leaving excess cash with the central bank. The hope is to encourage lending, in turn boosting business investment and consumer spending.
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