WASHINGTON (Reuters) – U.S. President Donald Trump’s push for low interest rates reached a new pitch on Wednesday, when he demanded the Federal Reserve take the extraordinary step of sending them below zero.
Outside of Washington, D.C., Fed policymakers often face the opposite complaint. Interest rates are too low already, Americans tell Fed officials when they speak at Rotary Clubs and chambers of commerce around the country. Savers, and particularly those near retirement age, are not getting enough return from their savings accounts or fixed investments.
The negative rates Trump is pushing, already in place in some parts of Europe and in Japan, would effectively charge people who save their money, and reward those able and willing to borrow. They were so unpopular in Japan that they became a hot topic on talk shows and tabloids, which highlighted consumers buying safes to stash their cash at home instead of with banks.
Fed policymakers have already dismissed such a move as unnecessary, given the relatively strong economy, as well as too risky and politically unpopular. U.S. savings rates are almost three times higher than they were before the Great Recession.