There are plenty of views, and market pricing, about to indicate the possibility of negative Fed rates ahead. For example, Guggenheim and DoubleLine.
On Wednesday this week Fed Chiar Powellis expected to use his speech to quash such speculation (see that link above and also this one: WSJ says the Federal Reserve is unlikely to consider negative interest rates)
JP Morgan don't like the idea of negative rates either (as a good rule of thumb, any banks with bond trading desks don't like ;-) ):
- negative fed funds "may not necessarily be feasible in practice, even in the current rate environment"
- "Negative yields are unfriendly to both MMFs and banks"
- Market structure in the money markets "naturally works against the possibility of negative fed funds rates"
- JPMorgan continues to believe that negative interest-rate policy isn't an option in the Fed's toolkit
The note goes on with more, but you get the gist. ps. I am not saying JPM is not making reasonable points.
