Negative Interest Rates
Interest rates are negative when the rate of interest is below 0%. This requires the lender to pay the borrower for the pleasure of lending them money.
- First time this happened was in early 2016
- No instance in over 3,000 years of history before 2017
- Like low interest rates, they pull consumption forward. Low rates encourage consumers to spend.
- Bloomberg keeps a running tally of total bonds that yield negative rates
- Totaled $8 Trillion in January 2019