JPMorgan Says Benefit of Negative U.S. Rate Might Outweigh Costs

A negative Federal Reserve policy rate is still improbable, but if it were to happen it could be a net benefit, according to JPMorgan Chase & Co.

“Mildly negative rates such as -10 basis points for a year or two could be beneficial in the current conjuncture,” strategists led by Nikolaos Panigirtzoglou wrote in a note Tuesday. However, he added that “we still view a negative Fed policy rate as unlikely,” and emphasized that rates would need to be just slightly negative, and not for too long, in order to be effective.