Fed: Negative rates are way down on the list – Nordea

Markets have increased bets on the Fed introducing negative rates but Nordea’s analyst Morten Lund does not think the Fed is close to crossing the Rubicon of negative interest rates.

Key quotes

“We do not think the Fed will introduce NIRP – not even if the economic outlook worsens and our worst case scenario unfolds. However, that does not mean that the Fed is ‘done’ yet.”

“Further measures will just not be conventional ones, but rather we should expect more initiatives that aim to provide credit as well as secure market functioning (such as purchases of government and corporate bonds and extending the PPP liquidity facility).”