Fed's Yellen: Not sure we can do negative rates: "As whispers mount that the Fed could implement negative interest rates as a way to goose economic activity, Chair Janet Yellen said Wednesday the central bank has not completely researched whether that would be legal.
During her semiannual congressional testimony, Yellen said the Federal Open Market Committee discussed charging banks to hold excess reserves at the Fed but never fully researched the issue.
"We didn't fully look at the legal issues around that," she said. "I would say that remains a question that we still would need to investigate more thoroughly."
Asked whether she foresees the Fed cutting rates after just hiking its interest rate target in December, Yellen said she did not expect that to happen anytime soon as she considers the risk of recession low.
"There would seem to be increased fears of recession risks that is resulting in rising in risk premia. We've not yet seen a sharp drop-off in growth, either globally or in the United States, but we certainly recognize that global market developments bear close watching," she told the House Financial Services Committee."
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