Associate Professor of Economics Ann Owen was quoted in a National Public Radio Morning Edition segment and in a Christian Science Monitor article, both of which addressed this week's Federal Reserve interest rate cut. In a piece titled "Fed Rate Cut boosts Stocks;Another Cut Coming?" on Wednesday, March 19, Owen told NPR's Jim Zarroli that indeed the Fed must do what it takes to keep the economy going but that there remains a risk that subsequent Fed decisions might trigger inflation. She pointed out that the Fed had already increased this risk by extending borrowing to additional Wall Street firms.
The Christian Science Monitor's article titled "Fed Cuts Short-Term Interest rates by Three Quarters of a Percent" examined the implications of the fact that, adjusted for inflation, interest rates are now negative. Owen discussed the last time the country experienced negative interest rates in 2003, when Fed chairman Alan Greenspan lowered short-term interest rates. "There were pretty steady decreases," recalled Owen. "Negative interest rates are an unusual position to be in, but not unprecedented," she said.
In discussing current implications of interest rates falling so low so quickly, she said, "When interest rates are down, people from other countries won't want to keep their money here," says Ms. Owen. "So demand for the dollar is down."
The Christian Science Monitor's article titled "Fed Cuts Short-Term Interest rates by Three Quarters of a Percent" examined the implications of the fact that, adjusted for inflation, interest rates are now negative. Owen discussed the last time the country experienced negative interest rates in 2003, when Fed chairman Alan Greenspan lowered short-term interest rates. "There were pretty steady decreases," recalled Owen. "Negative interest rates are an unusual position to be in, but not unprecedented," she said.
In discussing current implications of interest rates falling so low so quickly, she said, "When interest rates are down, people from other countries won't want to keep their money here," says Ms. Owen. "So demand for the dollar is down."
