Federal Reserve Bank of San Francisco
FRBSF Economic Letter
How Much Could Negative Rates Have Helped the Recovery?
AbstractThe Federal Reserve dropped the federal funds rate to near zero during the Great Recession to bolster the U.S. economy. Allowing the federal funds rate to drop below zero may have reduced the depth of the recession and enabled the economy to return more quickly to its full potential. It also may have allowed inflation to rise faster toward the Fed’s 2% target. In other words, negative interest rates may be a useful tool to promote the Fed’s dual mandate.
Cite this item
Vasco Curdia, "How Much Could Negative Rates Have Helped the Recovery?"
, Federal Reserve Bank of San Francisco, FRBSF Economic Letter, number 04, 2019.
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