Can Negative Interest Rates Save The US Economy/Markets?

negative interest rates investwithalex

I should have said negative interest rates and more QE. The short answer is, don’t bet on it.

Is the US headed for negative interest rates?

While most investors still think the FED will raise interest rates in the near future, quite a few people are beginning to realize that it will not happen. On the contrary, given the state of today’s economy and earnings, the FED is just as likely to go negative.

That works perfectly with our notion that a double bottom in 10-Year Note is still coming.

Listen, interest rates can only invert so far. I would say that an inversion over 3% would point to all out monetizations. And that’s an entirely different story with its own set of problems.

And while rates can invert up to that extent, I don’t believe such a change will have a meaningful impact. The velocity of that credit/capital has already worked itself through the system between 2008 and now. Additional capital will have minimal impact. Simply put, there is nothing to invest in. On both capital and expenditure side.