There’s been a lot of talk about negative interest rates as of late. With tepid economic growth, central banks have instituted subzero rates to invigorate the economy and resuscitate the consumer.
Is the United States about to experience negative interest rates? Not anytime soon, says JPMorgan Chase CEO Jamie Dimon.
Speaking in an interview with CNBC this week (via Bloomberg News), Dimon doesn’t think subzero rates are “in the cards” over at the Federal Reserve. He added that if he were working at the U.S. central bank, he would be collaborating with policymakers on fiscal needs, arguing for “joint, coordinated, intelligent policy.”
With European central banks and the Bank of Japan (BOJ) embracing subzero rates, how does he think it’s going for them? Not great.
“Overseas, I don’t think it’s going to work that well,” Dimon said. “I think it’s going to have a lot of unintended consequences that we don’t understand and you guys will be writing books for 50 years on it — what we could have done, should have done, might have done, and what we learned.”
This comes a couple of days after former Fed Chair Alan Greenspan warned the negative rates would “warp” savings and investment (SEE: Alan Greenspan attacks negative interest rates, says it will ‘warp’ savings and investment).
“The big argument about excessively low interest rates for a very long period of time is that it warps the investment pattern on real investments,” Greenspan said.
Fed Chair Janet Yellen has told lawmakers that subzero rates are on the table in the event of an economic catastrophe (SEE: Fed Chair Janet Yellen reiterates that negative interests aren’t ‘off the table’).
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