Federal Reserve Vice Chairman Stanley Fischer commented on negative interest rates earlier and said that they seem to be working in other countries. However, he reiterated that the U.S is not considering this policy.
Two big economies, European Union and Japan are relying on stimulus packages that include a negative deposit rate to boost inflation and revive the economy. ECB President Mario Draghi and BOJ Governor Haruhiko Kuroda have both states that they are considering cutting the rates below zero if needed in the future, even though concerns about risks and side effects rise.
Fischer said on Bloomberg TV early Tuesday that it’s impossible to say whether the next interest rate hike would be “one and done”. He made the hawkish comments over the past few days for the second time.
“We’re in a world where they seem to work,” Fischer said.
The U.S. employment report due on Friday is expected to show an increase of 180,000 jobs in August, according to the median estimate of 89 economists polled by Reuters, below the better-than-expected 255,000 in July and 292,000 gains in June. Since both Yellen and Fischer have signaled that they are data dependent the report will play a crucial part on the decision of rate hikes.