Global Economic Distress: Negative Interest Rates Exacerbate The Global Economic Crisis

The president of the former Federal Reserve Bank of Dallas believes that the radical monetary policy of central banks is the cause of today's global economic disaster.

McTeer explained that although Federal Reserve officials are smart and capable people, their current monetary policy has failed.

McTeer is a former FOMC member who has observed the policy performance of the Federal Reserve System over the past 36 years and believes that the Federal Reserve is waiting too long for monetary tightening measures.

McTeer's criticism of the Fed was endorsed by other economists.

These economists have argued that the trillions of devalued dollars entering the market will exacerbate the current economic downturn and make the market addicted to liquidity.

McTeer was known for his prolific writing and straightforward speech style in the Fed.

He has been criticizing the Federal Reserve's ultra loose monetary policy and believes that low interest rates have lasted for too long.

However, McTeer also acknowledged that bad luck and unfortunate opportunities exacerbated the current adverse situation.

He said that after the first Federal Reserve took monetary tightening measures, international economic developments were developing in a unbearable direction.

At that time, the slowdown of China's economy became more obvious, thus disrupting the market.

Earlier this week, Yellen refused to make a monetary plan for the world's largest economy, but acknowledged that the issue needed more research.

However, the negative interest rate is McTeer's disagreement.

Speaking of the next potential action of the Fed, McTeer said the Fed will not adopt negative interest rate measures, and they will not be able to implement negative interest rates.

McTeer explained that negative interest rates will not become the Fed's choice, because the Fed has established the Fed's basic interest rate mechanism through the establishment of the Fed fund interest rate mechanism, which calculates the overnight lending rate of the Federal Reserve to other financial institutions.

The current benchmark interest rate calls for more positive measures on central bank deposit rates.

McTeer believes that if the Federal Reserve tries to take

It will take them several years to restore the balance of monetary policy measures.

McTeer further believes that the Fed's delay in raising interest rates has made it possible to move from Japan to raise interest rates.

The central bank adopted negative interest rate measures and opposed the policy of negative interest rates.

Now, as the international market is in crisis, the chairman of the Federal Reserve, Yellen, needs to take a more proactive approach to solve the global economic problems.

McTeer, a former Federal Reserve official, even suggested that Yellen should show more concern for the recent market turmoil as far as possible in his future speech.

On Friday (February 12th), the Asian stock market was selling off, and the Nikkei index fell 4.8% to 14952 points, the lowest since October 2014.

In addition, the yen plunged 11% last week, making it plunge into the safe purchase price, thereby boosting the popularity of the yen.

However, the three major indexes of the US stock market: the Dow Jones industrial average, the standard & Poor's 500 index and the NASDAQ index all rose sharply, which made up for the 5 day decline.

At the same time, the latest negative news in the market is the negative interest rates in Japan and Europe.