Here It Comes: New York Fed President Says "If Economy Weakens Further, Would Consider Negative Rates"

Tyler Durden's picture

Remember when the Fed's dots - less than a month ago - suggested there would be 4 rate hikes in 2016? Ah, the memories. Well, you can not only forget that (now that the market is estimating the next rate hike will come in October if ever), but it appears that the Fed will follow Kocherlakota's advice after all and not only cut rates (the possibility of a January rate cut now is 10%), but will pass go, and collect negative rates:


After today's atrocious, recessionary data, one can be certain that the Fed is furiously considering negative rates.

While the comment came from the Dudley Q&A, his full speech can be found here.

And just to add confusion, here is a spurious Bloomberg headline which will hardly aid matters:


So both NIRP and more QE, just as anyone who is not a tenured economist or drama major predicted.

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NotApplicable's picture

When in doubt, whip it out!

The Juggernaut's picture

This minimum wage hike discussion is simply jargon.  The minimum wage is enabling the Fed Reserve to continue to make the currency worthless.  The minimum wage hike is to prevent riots in the street and to hide the truth that someone (a small handful of people) controls everything!

philipat's picture

How can anyone take The Fed seriously now? Problem is that The Fed and the Cartel control about 70%+ of "Market" activity, so who is going to break ranks first??

Soul Glow's picture

Is the Fed trying to keep altos from reading ZH today?

Gaius Frakkin' Baltar's picture

So we're all suppose to act surprised so the DOW can rally 1000?.

All hail the joo bankers for being so generous!

NoDebt's picture

And the market bounce from this incredibly bullish comment?  ZILCH.  I think jawboning is losing it's impact.

DownWithYogaPants's picture

I need Selma Hayak to jawbone me and provide lip service too!

Haus-Targaryen's picture

This shouldn't surprise anyone.  

Negative + QE and when a bank goes bust they'll do depositor confiscations. In this exact order.  

Anasteus's picture

Maybe not. QE would neutralize NIRP in that the interest the banks will have to pay on their excess reserves to CB will be positively balanced by yields earned in the casino unleashed by the fresh pile of new credit, much like it happened with ZIRP just with a bit shifted ratio. The QE+NIRP scenario is the same scam indistinguishable from the previous QE+ZIRP, best portrayed by equality 0 + 2 = -1 + 3.

The FED just hopes 'QE+ZIRP renamed to QE+NIRP' magic will work. That's all that is to it.

slimycorporatedickhead's picture

do you mean down with yoga pants or like... "down" with yoga pants? wheres all the rate hike dummies now? 4 rate hikes in 2016! "done deal" they were saying like 2 weeks ago, ya you experts really know what you're talking about

greenskeeper carl's picture

Agreed. No more "open mouth" operations to save the day. Better fire up the printers. How does anyone listen to these people anymore. THis entire decline caught them completely flatfooted, as has every other one. WHat a bunch of morans

Uchtdorf's picture

Sorry, bud. They're not surprised, at all. They're doing this on purpose. This is how they force us into a global currency.

Shad_ow's picture

Perhaps this is why they are allowing the market to fall. 

MalteseFalcon's picture

FED needs to make up its mind; the stock market or the currency.  The FED has already cut bait on the real economy years ago.

Gold is gaining on every other currency in the world.  To forestall that happening to the dollar, the FED raised rates.

Can't have it both ways anymore.

Time to decide.

War only works if you win decisively.

Thought Processor's picture



Nice summation of current events.  Well done.


Both succinct and accurate.



True Blue's picture

Well, when someone is holding a gun to your head, it doesn't matter if he looks like Bozo the Clown or the personification of Hell itself -you take him 'seriously'.

In fact, you may take the crazy one a little more seriously.

Save_America1st's picture

I think this is what they've wanted all along.  They can't continue to have the strongest currency even if it's still the reserve currency (or petro-dollar) for a what little time left there is for the dollar.  I think they want to roll out QEternity real bad, so they threw in a 25bps rate hike (pretty much means nothing), and now they're purposely bringing down the bubble as best they can in order to go neg rates and will print Trillions more.  This can only be good going forward for phyzz PM's.  Paper will crash sooner than later...and then phyzz will disappear. 

Bail-Ins next, bitchez.  Get your fiat out of the bankster system as best you possibly can and get outta the fucking way of what's to come, cuz it ain't gonna be fun for anyone...especially those who didn't head the warnings and didn't get to safety before the Tsunami hits. 


***Is ZeroHedge getting hit with DOS attacks this morning?  The site is pinging very slow and throwing out website maintenance errors.  Or is it just me noticing this???

Cangaroo.TNT's picture

Protonmail, too.  Isn't ZH hosted in Switzerland, too?

PrezTrump's picture

Def getting hit today...

I  think we have another bubble left before we go negative.

Fed 'credibility' is critical..  

Luc X. Ifer's picture

Fed 'credibility'?!  Same guys who trumpeted rate hike just few months ago now talk negative rates?! Isn't obvious they are not idiots but puppets singing and dancing how it is asked from them by their masters behind the curtain :) ?!

strangeglove's picture

We raise rates while we lower them. oh thoose negative rates are for us not you, See you in nantuket


The Saint's picture

Exactly.  Ol' Yeller was talking about negative rates just days before raising fed funds.  Something odd is going on and it's not good for the average American.

giggler321's picture

Don't they have to ban cash before they take it neg since there would be runs?  or just ajoined with capital controls

Uchtdorf's picture

"or just ajoined with capital controls"


If their maniacal options have anything to do with control, they will use them. Control is good, but only for them. Prepare accordingly.

PrezTrump's picture

"minimum wage is enabling the Fed Reserve to continue to make the currency worthless"

if that was all they were doing we would all be much better off.

Fed makes currency worthless via inflation, then they need to raise wages to prevent starvation.  Not the other way around.

Cangaroo.TNT's picture

Well, good thing it's only a hypothetical "if".

Hitlery_4_Dictator's picture

Fuck you, eat a dick Dudley, we here at ZH called it all along. We were not fooled. Call us conspiracy theorists, i guess it's a conspiracy FACT now.  UNREAL.

Bay of Pigs's picture

Ask any American who the William Dudley is and well over 95% of them will give you a blank stare.

Hitlery_4_Dictator's picture

Shit, they don't even know where Mt. Rushmore is or who the vice presdient is. 

glenlloyd's picture

that would be tin-foil hat wearing conspiracy theorists if you please...

greenskeeper carl's picture

No shit. If I wanted to merely be a "conspiracy theorist" I wouldn't be wearing this sweet hat, and I don't want that overlooked.

WorkingClassMan's picture

Dudley-Do-Wrong and the unFed are at the middle and working-class' throats like Bela Lugosi.

MrNosey's picture

There will be no real recovery what so ever!

The elite will soon run and hide in the bunkers paid for with citizens taxes, after engineering a full economic collapse as well as starting WW3, plus they will make sure that there are enough Jihadi's in the West to start a race war.

That should be enough to cover up the failed fiat ponzi scheme and take care of the 'excessive' population......

Squid Viscous's picture

Stick save, and a beauty by Dud-lard, but ...wait! there's a turnover in the neutral zone and the Palookaville Bears are charging back down the ice!

SteveNYC's picture

Hey "DUD"ley, you start charging me to use your shitty insolvent banks, then it will be SteveNYC Bank of AMSEC from now on:



Wulfkind's picture

Cue Mr. Yellen to whip out her boobs and show her NIRPles.


de Cosmos's picture

Just think about Yellen in yoga pants.

Uchtdorf's picture

Hello, ZeroHedge. This is Mrs. Uchtdorf. My husband has been hospitalized with a massive stroke after reading the yoga pants comment above. The horror.

Perimetr's picture

And when negative rates don't work, then outlaw cash, gold, and proceed with the bail-ins, and then martial law.

Uchtdorf's picture

You're going to be one of the first to get chipped for sharing thoughts like that. It will only sting for a minute or two. 

American Psycho's picture

Fuel up the helicopters, time for some cash drops...GET TO THE CHOPPA

Soul Glow's picture

Everything is fine right now, but....if things get bad we're considering slaughtering a few unicorns to our god molec.

mandalou's picture

come on man, do the cramer mix for this. We all love it.

ptolemy_newit's picture

follow Ptolemy_newit, he seems yto be banned ot blocked


PTR's picture

Maybe it'll be a diving board.  Time will tell.