Equally Expansionary

monetary policy While six central banks now charge private banks to hold deposits at the central bank (negative interest rates), the Federal Reserve doesn’t. However, after inflation, the rate the Fed pays banks on deposits has been negative since 10/09 except for most of the period 1/15-9/15. That is, CPI inflation has consistently been above what the Fed pays private banks, meaning monetary policy here is arguably as expansionary as in Europe.


Share This Post
Facebook Twitter Email

Speak Your Mind


This site uses Akismet to reduce spam. Learn how your comment data is processed.