Should the US pursue a negative interest rate policy?A complete answer will address the following concepts:What is the current macroeconomic situation of the US?What benefits would a negative interest rate policy have?What drawbacks would a negative interest rate policy have?Are the drawbacks worth the benefits?You may reference the situations in other countries if you would like (it may make answering this question easier), but it is not required.  The answer only needs to be 1-2 paragraphs long.

Question
Asked Oct 5, 2019
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Should the US pursue a negative interest rate policy?

A complete answer will address the following concepts:

  • What is the current macroeconomic situation of the US?
  • What benefits would a negative interest rate policy have?
  • What drawbacks would a negative interest rate policy have?
  • Are the drawbacks worth the benefits?

You may reference the situations in other countries if you would like (it may make answering this question easier), but it is not required.  The answer only needs to be 1-2 paragraphs long.

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Expert Answer

Step 1

According to FED meeting in June’2019, the most recent forecast showed that the U.S. GDP growth will reduce form 3% in 2018 to 2% in 2019, then 2% in 2020 and 1.8% in 2021.

Step 2

Since the economic growth in the U.S. is expected to fall, the last resort to boost growth is Negative interest rates. It is basically interest rates below zero which will reduce the cost of borrowin...

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