As word leaked out late yesterday afternoon that the Federal Reserve will be requiring U.S. banks to consider the idea of how they theoretically could handle a “negative interest rate” scenario, Fed Chair Janet Yellen told a congressional hearing today that “the central bank has not completely researched whether that would be legal.” Yellen said the Federal Open Market Committee discussed charging banks to hold excess reserves at the Fed but never fully researched the issue.
“We didn’t fully look at the legal issues around that,” she said. “I would say that remains a question that we still would need to investigate more thoroughly.”
Asked whether she could the Fed cutting rates after just raising its interest rate in December, Yellen said she did not expect that to happen anytime soon as she considers the risk of recession low.
Watch Janet Yellen’s testimony from today below.
A drop in oil prices and a plunge in Disney and IBM stock marked another down day for the Dow.
Here are the final numbers from Wednesday, 2/10/16 on Wall Street
Dow Jones Industrial Average: 15,914.74 (-99.64 / -0.62 %)
NASDAQ: 4,283.59 (+14.83 / +0.35 %)
S&P 500: 1,851.86 (-0.35 / -0.02 %)