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re: Forecast when the Fed Reserve will increase interest rates again & how often?
Posted on 2/11/16 at 8:15 am to LSURussian
Posted on 2/11/16 at 8:15 am to LSURussian
Sweden just went negative on their rates. How the hell does that work?
Posted on 2/11/16 at 8:27 am to BobRoss
Sweden implemented negative rates over a year ago. Japan just went to negative rates this week.
In simplest terms, "negative rates" means the country's central bank charges interest on deposits that banks have in the central bank rather than paying interest to those banks for their deposits.
For example, in the U.S. the Federal Reserve pays banks an annual interest rate of 0.50% on the "excess reserves" (reserves over the required reserves which the bank must have in the Fed) while in Japan now their central bank charges an interest rate on bank reserves.
It's sort of a sign of desperation on the central bank's part to jump start more lending by banks.
In simplest terms, "negative rates" means the country's central bank charges interest on deposits that banks have in the central bank rather than paying interest to those banks for their deposits.
For example, in the U.S. the Federal Reserve pays banks an annual interest rate of 0.50% on the "excess reserves" (reserves over the required reserves which the bank must have in the Fed) while in Japan now their central bank charges an interest rate on bank reserves.
It's sort of a sign of desperation on the central bank's part to jump start more lending by banks.
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