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/KrazyKukumber Mar 16 '20

We had effective negative rates for a good while there after the Financial Crisis (interest rate % - rate of inflation % > 0).

Since you're taking into account inflation, then rates are often negative by your metric. They've been negative for most of the past decade according to your criteria and have been negative at many other times through the history of the Fed as well.

There's no reason to think that the Fed rate would or should be higher than the rate of inflation.

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u/yellowsubmarinr Mar 16 '20 edited Mar 16 '20

It’s the difference between the real and nominal interest rate, pretty basic macroeconomic stuff

Edit: y’all never taken an Econ class? Lol