Nonetheless, Fed Chair Janet Yellen is back on that idea today in Congressional testimony. Specifically, Yellen Says Fed Evaluating Possibility of Negative Rates in US.
"We had previously considered them and decided that they would not work well to foster accommodation back in 2010," Yellen said Thursday, answering questions during a second day of testimony before Congress. "In light of the experience of European countries and others that have gone to negative rates, we're taking a look at them again because we would want to be prepared in the event that we needed to add accommodation."
A 2010 Fed staff memo posted on the central bank's website late last month showed Fed economists grappled with a number of issues related to implementation of negative rates at the time, including possible legal obstacles. Yellen said Thursday that negative rates might be legal, but the question remained open to further examination.