Negative US Interest Rates? Not Likely, Say Investors
Important interest rates in Europe and Japan have been negative for several years. The moves, however, could provide a warning about what happens when central banks' efforts to support growth create problems instead.
That is the idea expressed last week by finance officials and others at the Reuters Global Investment Outlook 2020 Summit. They argue that the effects of below-zero interest rates are long-lasting and harmful.
Interest rates are negative when lenders – not borrowers – must pay interest.
Critics say negative rates punish people who save money, cause problems for big banks and lead people to take bigger risks to get a small amount of interest.
About $12.5 trillion of the world's bonds, about 30 percent of the debt of countries in the developed world, pay negative interest. The Bank of Japan and the European Central Bank want economic growth and a small amount of inflation, so they have cut their interest rates to below zero.
However, a negative interest rate policy helps keep other interest rates, like the ones banks pay savers, low.
That means older people saving for retirement or in retirement are losing money, explained a recent blog post by BlackRock.
Blackrock and other investors say the U.S. Federal Reserve under Chairman Jerome Powell has been closely watching the situation in Europe and Japan. They say Powell wants to avoid negative rates in the United States.
"When you listen to Powell and other representatives of the Fed, they don't want to takes rates negative," said Dan Ivascyn. He is an investment officer at bond seller Pacific Investment Management Co.
"It will be well down the list of the tools that they will use," he said.
The moves by Europe and Japan's central banks have raised a question about what tools others, such as the U.S. Federal Reserve, have to fight a slowing economy.
The U.S. central bank last month cut its overnight lending rate by a fourth of a percentage point to a target somewhere between 1.5 percent and 1.75 percent.
U.S. President Donald Trump has suggested that the Federal Reserve push interest rates into negative numbers as a way to permit the U.S. government to refinance its $22 trillion in debt.
That is unlikely to happen, some of the financial experts at the meetings said.
"Never say never, but there is a real hesitancy here in the U.S. to take rates below (zero)," said Greg Peters. He is with the investment company, PGIM Fixed Income.
"I think the U.S. has had the benefit of seeing the (effects) of negative rates elsewhere," he added.
Negative interest rates do not always lead to an increase in lending and growing business investment.
Negative rates can cause financial organizations to earn less. If their profits are affected they might stop lending altogether and that would hurt the economy.
Anne Mathias supervises investing at Vanguard. She is an expert in worldwide interest rates. She said negative interest rates are unlikely.
"If we go into a recession...we will just go back to quantitative easing and expand the balance sheet again," she said.
Andrew Hsu is a manager of the DoubleLine Total Return Bond Fund. He warned about the effects of negative rates.
"If we had negative rates for the next 10-20 years... no one in this room will be able to retire," he said.
I'm Susan Shand.
1.negative rates 负利率
After all, all the Fed has to do is create some inflation to generate negative rates.
2.interest rates 利率
Low interest rates are bad news for savers.
Solving the pollution problem is a long-lasting battle.
4.balance sheet 资产负债表
You can see that in the Balance Sheet.
5."If we go into a recession...we will just go back to quantitative easing and expand the balance sheet again," she said.
go back to 返回
Let me just go back to the point I was making.
Should I go back to the motel and wait for you to telephone?
6."If we go into a recession...we will just go back to quantitative easing and expand the balance sheet again," she said.
go into a recession 陷入衰退
The US and world economy did not go into a recession in either case.
That situation may still be reversed if the US were to go into a double-dip recession.
欧洲和日本几年来一直维持负利率 。然而，这些举措可能为人们提供一个警告，即当各国央行支持经济增长的措施产生问题时，会发生什么 。
这是上周在《路透全球投资展望2020峰会》，各国财政官员等人士表达的观点 。他们认为，负利率的影响是长期且有害的 。
全球约有12.5万亿美元的债券是负利率，占发达国家债务的30% 。日本央行和欧洲央行希望维持经济增长和小幅通胀，因此将利率降为负利率 。
贝莱德集团等投资方表示，美联储主席鲍威尔一直在密切关注欧洲和日本的局势 。他们称鲍威尔希望避免美国出现负利率 。
丹·伊瓦辛表示：“根据鲍威尔和美联储其他代表的说法，他们不想采取负利率 。”伊瓦辛是债券承销商太平洋资产管理公司的投资官员 。
格雷格·彼得斯表示：“说话留一线，但是美联储的确在采取零利率政策上非常犹豫不决 。”他就职于PGIM固定收益投资公司 。
负利率会导致金融机构的收入减少 。如果金融机构的利润受到影响，他们可能会完全停止放贷，这将会损害经济 。
安妮·马蒂亚斯在Vanguard集团负责投资 。马蒂亚斯是一名全球利率专家 。她指出，美国不太可能实施负利率 。
安德鲁·许（Andrew Hsu）是DoubleLine Total Return Bond Fund的经理 。他对负利率影响发出警告 。