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