Negative rates talk a problem for money market funds

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By Frank Jackman
18 May 2020

The pain that negative rates in dollars could cause money market funds hangs like an albatross around the US Federal Reserve’s neck. Talk of them has picked up over the last week as US Federal Funds Futures prices started to imply they were on their way, while president Donald Trump pushed the topic on Twitter, even though and Fed chair Jerome Powell appeared to rule them out.

On Tuesday last week, Trump took to Twitter to again promote a negative rate cut as a “gift” to the US economy. A day later, Powell ruled out such a move, stating that “the [Federal Open Market] Committee's view on negative rates really has not changed” and that ...

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