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Yellen Says Negative Rates On The Table "If Outlook Worsened"

As the market now diligently calculates the suddenly surging odds of a December rate hike, here's Yellen with a preview of what will happen once the rate hike cycle is aborted...

  • YELLEN SAYS IF OUTLOOK WORSENED FED MIGHT WEIGH NEGATIVE RATES
  • YELLEN SAYS NEGATIVE RATES COULD HELP ENCOURAGE BANKS TO LEND

... just as it was aborted in Japan in August of 2000 when the BOJ also decided to send a signal how much stronger the economy is by hiking 25 bps, only to cut 7 months later and to proceed to monetize not only all net Japanese debt issuance a decade later, but to hold half of all equity ETFs.

The good news:

  • YELLEN SAYS SHE DOESN'T SEE NEED FOR NEGATIVE RATES NOW
  • YELLEN SAYS FED SEES ECONOMY ON STEADY PATH OF IMPROVEMENT

Because when have the Fed's forecasts before ever been wrong.