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A New Advocate for Negative Interest Rate Policy: Donald Trump

Summary:
I was surprised last week to see Donald Trump directly advocate negative interest rates. You can see his tweet below, along with my reaction. The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. We have the great currency, power, and balance sheet.....— Donald J. Trump (@realDonaldTrump) September 11, 2019 Given Donald Trump's endorsement of negative rates as part of the Fed's toolkit, the idea that negative rates are politically impossible because of Republican opposition should be thrown out the window. https://t.co/uVby0YIS0f— Miles Kimball (@mileskimball) September 11, 2019 ....The USA should always be paying the the

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I was surprised last week to see Donald Trump directly advocate negative interest rates. You can see his tweet below, along with my reaction.

Donald Trump also reacted to the European Central Bank’s cut in a key interest rate from negative .4% to negative .5% (along with other measures the ECB intends to be stimulative):

Here is my reaction, both to the ECB’s action and to Donald Trump’s tweet about it:

My note of approval for Donald’s tweet about the ECB’s action struck Ivan Werning as too much:

Ivan is one of the economists I most respect in all of the world, so I felt a bit distressed and offered an extended explanation and defense of what I had written, and Ivan added some more reactions:

Along the way, I had some other Twitter convos about Trump, negative rates and eurozone negative rate policy:

Here is some other description and commentary I gave of the ECB’s action:

But my favorite bit of Twitter commentary on the ECB’s action was not my own. It was from “Doo B. Doo”:

Miles Kimball
Miles Kimball is Professor of Economics and Survey Research at the University of Michigan. Politically, Miles is an independent who grew up in an apolitical family. He holds many strong opinions—open to revision in response to cogent arguments—that do not line up neatly with either the Republican or Democratic Party.

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