October 15, 2019 / 11:01 AM / a month ago

Sub-zero interest rates could be problematic in U.S.: Fed's Bullard

FILE PHOTO: St. Louis Federal Reserve Bank President James Bullard speaks at a public lecture in Singapore October 8, 2018. REUTERS/Edgar Su

LONDON (Reuters) - St. Louis Federal Reserve bank president James Bullard said on Tuesday that negative interest rates could be problematic in the United States.

Central banks in the euro zone and Japan have cut interest rates below zero to boost inflation and economic growth, raising a debate about the ammunition other major central banks such as the U.S. Federal Reserve have to fight a slowdown.

“I’m not a fan of this policy,” Bullard told the press on the sidelines of an event in London.

“Negative interest rates have had mixed results where they’ve been tried,” he said, adding that it was not clear either how multi-trillion dollar U.S. money markets would adapt to such a policy.

Bullard is currently a voting of the Fed’s rate-setting committee and last month voted for a big half-point rate cut.

The Fed cut interest rates by 25 basis points last month and investors widely expect the central bank to lower rates again when it meets on Oct. 29-30.

Reporting by Marc Jones and Dhara Ranasinghe

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