NY Fed’s Williams says central bank has tools more powerful than negative rates

NY Fed’s Williams says central bank has tools more powerful than negative rates

© Reuters. FILE PHOTO: John C. Williams, president and CEO of the Federal Reserve Bank of New York speaks to the Economic Club of New York in the Manhattan borough of New York

NEW YORK (Reuters) – Negative interest rates are not a tool that makes sense for the U.S. central bank, New York Federal Reserve Bank President John Williams (NYSE:) said on Thursday.

“We have other tools that I think are more effective and more powerful to stimulate the economy,” Williams said during a moderated conversation organized by Stony Brook University in Long Island, New York.

Williams pointed to low interest rates, forward guidance and the Fed’s balance sheet as tools the central bank could use to help the U.S. economy return to maximum employment.

“I don’t think negative rates is something that makes sense given the situation we’re in because we have these other tools that can be used.”

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