Fed Won’t Move Rates Negative, Says Morgan Stanley’s Sheets

The video discusses the high risk of deflation in 2020 and the potential for inflation in 2021-2022, driven by policy easing and fiscal stimulus. It explores the possibility of negative interest rates in the US, highlighting the risks and historical underperformance of economies with such policies. The Federal Reserve's reluctance to adopt negative rates is noted. The Bank of England's approach is also examined, considering a funding scheme for banks but not cutting target rates below zero, due to potential negative impacts on the banking system and consumer sentiment.

How does the speaker view the likelihood of inflationary outcomes compared to deflationary outcomes?

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What does the speaker suggest about the relationship between economic growth and inflationary pressure?

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What are the potential risks associated with negative interest rates according to the speaker?

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What is the speaker's perspective on the effectiveness of negative interest rate policies in other countries?

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What factors does the speaker believe will influence the Bank of England's decision on interest rates?

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