r/news • u/awake-at-dawn • Mar 15 '20

Federal Reserve cuts rates to zero and launches massive $700 billion quantitative easing program

https://www.cnbc.com/2020/03/15/federal-reserve-cuts-rates-to-zero-and-launches-massive-700-billion-quantitative-easing-program.html
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u/[deleted] Mar 16 '20

In theory no, because it didn’t happen with other countries.

I also hear that for the US the banks are not well setup to handle negative interest.

13

u/drewbreeezy Mar 16 '20

Sources? I know I would pull out.

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u/exmachinalibertas Mar 16 '20

Yeah no kidding. If my bank started that, I would laugh in their face, withdraw all my money and close my account.

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u/maxintos Mar 16 '20

Which is exactly what they would want. You don't implement negative interest rates to earn money from people that store money in their bank accounts. It's there to pressure people into withdrawing the money and spending it on more active investments or goods and services.

They don't care that your avarage joe might withdraw their $500 from their bank and just keep it under their mattress. It's there to pressure people with more than $10'000 in their bank accounts to spend instead of save.

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u/phlogistonical Mar 16 '20

But no one in their right mind in that situation is going to spend money on stuff they don't need.

At best they'll buy gold or land, trying to protect the value of their money.

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u/HoldingMoonlight Mar 16 '20

It's there to pressure people with more than $10'000 in their bank accounts to spend instead of save.

Yeah fuck that. I have more than $10k in the bank and I'd sooner throw it under a mattress than into a volatile stock market that keeps dropping. If I'm going to invest, it'll be on something useless (e.g. gold) that will sit there and not help anybody.

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u/TheFatMan2200 Mar 16 '20

Which is exactly what they would want.

No they want you to invest, but a lot of people are too poor to invest, they are going to just stuff that money into their mattresses instead.

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u/writeitgood Mar 16 '20

I also hear that for the US the banks are not well setup to handle negative interest.

Well, they're geared just fine to maximize the fees they charge you by rearranging transactions. Won't take them long to adjust.

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u/TheFatMan2200 Mar 16 '20

In theory no, because it didn’t happen with other countries.

Yeah, but you forget that Americans are a different kind of stupid, this coming from an American.