Negative interest rates are looking worse

And eurozone banks down 41% since ECB introduced negative interest rates, notes

That is from @RobinWigg.  The Japanese market has not responded positively either.

Of course negative interest rates, while intended as a form of stimulus, or currency depreciation, are also a tax on financial intermediation.  Negative interest rates, even if you agree with them in principle, are also a sign that more straightforward measures are politically impossible.

Here is Landon Thomas Jr. on negative rates in Sweden (NYT): “…many investors saw the rate cut as smacking of desperation and the latest sign that global central bankers are moving toward a round of competitive devaluations — also known as currency wars — as a way to stimulate their economies.”

Miles Kimball has written much in favor of negative rates, Izabella Kaminska against, if you wish to survey further opinions.  Here is Matt Rognlie.

I don’t see negative rates as the main problem today, but it’s getting harder to see them as a potential remedy.  They’re a sign that economies are trying to solve their core problems on the cheap.

Addendum: Here is Neil Irwin at NYT.

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