What is less than zero interest rate
Less Than Zero: Living With Negative Interest Rates. There is some good and bad in the upside-down world of negative interest rates, but how this scenario will play out is anyone’s guess. Once, it was a good thing to have money in the bank. Now, Danish companies pay taxes early to rid themselves of cash. Because of this, economists like to refer to 0 percent as the “zero lower bound on nominal interest rates”. But, as we are in the midst of finding out, 0 percent is not the true lower bound. The reality is that a corporation storing its millions in cash is not a feasible proposition and, as a result, interest rates as low as -1 percent can be seen today in financial markets. The Federal Reserve’s decision to cut interest rates to zero isn’t good news for savers — or spenders. The Fed said Sunday that it was cutting its benchmark federal funds rate by 1% to a