Negative rates could lower inflation expectations – San Fran Fed paper

Interest rates on paper

Negative interest rates may lower inflation expectations, a paper published by the Federal Reserve Bank of San Francisco finds.

Jens Christensen and Mark Spiegel analyse the Bank of Japan’s (BoJ) negative rate policy and its impact on inflation expectations. They use the breakeven inflation rate, which they define as the difference between nominal and real yields on government bonds, as a gauge for inflation expectations. 

The authors find that after the BoJ introduced its negative rate policy

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