Economy

Fed could use negative rates if US recession hits, Goldman Sachs says

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U.S. rate-setters could set negative interest rates in the future, despite their own current doubts about the risks of this unconventional measure, Goldman Sachs told CNBC Wednesday.

When central bankers implement negative interest rates, it means that banks, for instance, are paying to store cash. The idea behind it is to boost bank lending, push capital out to businesses, and stimulate the economy. This has been the policy by the European Central Bank (ECB) in the euro zone, since the aftermath of the sovereign debt crisis of 2011.

However, part of the financial community is sceptical about using this tool, especially over a prolonged time. They believe negative rates have consequences,…



Source cnbc.com

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