When the pandemic struck, the US Federal Reserve quickly reduced its key interest rate to near zero, where it had been for nearly a decade after the financial crisis. President Donald Trump renewed his heckling with the Fed via Twitter, complaining that his reluctance to go negative puts the United States at a disadvantage. President Jerome Powell has repeatedly rejected the idea, saying the Fed feared the policy would disrupt US money markets and preferred to use other tools. Further, he said, research on the effectiveness of negative rates was “quite mixed.” Yet an underlying current of concern has led a market gauge reflecting traders’ expectations for the Fed’s future policy to briefly dip below zero in May 2020, with some investors betting that the Fed should take the plunge. within a year. When the epidemic took hold, central banks that already had negative rates refused to lower them further, instead of increasing bond purchases and lending programs like the Fed also did. The European Central Bank lowered its rate in September 2019, imposing 0.5% on banks to conserve their cash. But in the six years since the ECB’s rates turned negative, the policy has sparked a growing outcry that it has crippled banks and robbed savers. In Germany – a nation with a strong pocket-money culture – the tabloid newspaper Bild denounced the central bank, portraying former ECB President Mario Draghi as a thrifty vampire he dubbed “the Count Draghila ”.

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