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Negative Interest Rates and the Fed: Just a Matter of Time

DALLAS—For the Fed to take interest rates into negative territory for the first time is not a far-fetched idea at all, writes Monty J. Bennett in this EXCLUSIVE commentary.

By Monty J. Bennett | Updated on July 21, 2015

DALLAS—Federal Reserve Chairman Janet Yellen recently reiterated that interest rates may rise this year, although that timetable seems to keep lengthening. The economy remains soft and uncertain, so who knows if and when a hike will occur? And what if business conditions turn sour and a recession beckons, what would monetary policymakers do then? 

What we do know about Fed policymakers is that they won’t sit on their hands and ignore their mandate to support stable price levels and full employment, even in a high debt, low interest-rate environment. Basically, I believe they would have four primary options.

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