This move prompted a barrage of Fed speakers, including the Fed chair, to remind the public that the Fed really, really, really does not believe in negative rates (but never say never), even though one could say the same thing for the BOJ, the ECB and the SNB... and look at them now. In fact, in a world where growth is only possible with trillions in new debt injections - and with debt already at crushing levels, interest rates have to be as close to zero if not below it - the Fed has emerged as the "rational" outlier that refuses to take rates negative.

And yet, in a world where the economy was already sinking ahead of the catastrophic collapse spawned by the coronavirus, there is only so much the Fed can do before it took is dragged into the NIRP vortex.

To be sure, in many ways the market's expectation for negative rates is rational. As we pointed out overnight, even Goldman is concerned that the Fed is simply not doing enough QE to monetize the massive upcoming treasury flood let along stimulate a global reflationary wave, which leaves it with just one other option: negative rates. Nordea's Andreas Steno Larsen looked at this dynamic and reached a similar conclusion: "the Fed is still not buying enough to fully re-ignite the global credit cycle. We find that the Fed needs to buy a lot of bonds compared to issuance before USD scarcity is finally fully eased in the system, leading to easier financial conditions in EM and ultimately global growth prospects being repriced positively" In other words, "the Fed will have to buy more than currently. This speaks in favour of even LOWER long USD bond yields, not higher."