The New Normal Abnormal – Negative Rates

Source : https://app.hedgeye.com/insights/49038-crash-boom-bang-global-central-planners-can-t-stop-the-selloff

With Bank of Japan being the latest country joining the Negative Rate group, there are a total of 5 countries having the “normal” rates. And i just wonder which country will be next to follow?

Source A: http://www.bloomberg.com/news/articles/2016-02-02/rates-less-than-zero-is-bank-stress-fed-wants-to-test-in-2016
Source B : http://www.cnbc.com/2016/02/12/next-country-with-negative-rates-could-be-canada.html

Central banks that have gone negative: (Source B)

  • Bank of Japan: Rate is minus-0.1 percent for some reserves
  • Danish National Bank: Deposit rate is minus-0.65 percent
  • European Central Bank: Deposit rate is minus-0.3 percent
  • Swedish National Bank: Main interest rate is minus-0.5 percent
  • Swiss National Bank: Main interest rate is minus-0.75 percent

Start of abnormal being the normal?

Only US has raised the rate back last year. And in my view, there is a worrying trend where more and more countries adopted negative rate. They are …