Negative Interest Rates (COULD IT ACTUALLY HAPPEN?)

The market has started pricing in the possibility of negative interest rates in 2021. Specifically, the trading prices of Fed Funds futures reflected the expectation that sometime around April 2021, we will start seeing NEGATIVE interest rates in the U.S. This is already happening in Japan and many European countries. It's a bizarre financial world we live in nowadays.Who knows if this will actually happen in the U.S., but I wanted to explore the possibility and also talk to you about the potential impact of negative interest rates on the economy and your wallet.

***ATTENTION: I have a new Instagram and TikTok handle @itsrosehan ***
That's my official account, and I will NEVER message you about investment schemes, so please be careful and block & report any scammers posing as me.

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***BOOKS I RECOMMEND 📚***

I Will Teach You to Be Rich (hilarious how-to book on personal finance for millennials)

The Little Book of Common Sense Investing (Jack Bogle's classic advice on index funds)

InvestED (step-by-step, millennial-friendly advice on how to pick stocks like Warren Buffett)

Unshakeable (this book = courage. blast ALL the fears & misconceptions you have about investing)

Rich Dad Poor Dad (#1 selling personal finance book of all time... need I say more?)

Think and Grow Rich (the ultimate book on money mindset and wealth consciousness)

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***MY FAVORITE MONEY TOOLS 🖤***

YNAB (I literally can't live without this budgeting app, so obsessed)

Wise (like Venmo but for international currencies - I use this app a LOT for my life in Mexico)

Ledger Nano S (crypto storage hardware wallet, because "Not Your Keys, Not Your Crypto"!):

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DISCLAIMERS & DISCLOSURES ❤

This content is for education and entertainment purposes only. Rose does not provide tax or investment advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal.

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SAY HI ON SOCIAL! 👋🏼

[George_Perez]

What a crazy world we live in, printing money like no tomorrow, negative interest rates, and a roll of toilet paper is worth more than a barrel of oil.. what's next?! 😂🔥🚀

[jsurfin]

If you were my professor back in the day when I was in college, I wouldn't be falling asleep in finance class!

[luckyguy]

Gold & silver, yes I’ve been waiting for you to cover this. I want to hear your thoughts on precious metals and alt currencies. 😀😬

[vaderwashere]

Thank you for another good video Rose. We currently have our 6 month emergency fund in a high-yield savings account. If the interest rate (at the bank) goes below 1% and borrowing money (for an individual from a lender) gets low enough (1-2% non-mortgage related), it really penalizes the people who have always done things correctly with their finances. We have so many ways to pull out money if an emergency happens (HELOC, 401K, ESPP, etc.), that I am very close to just throwing our $60K into the stock indexes, rather than a savings account. This is not fiscally conservative, or the traditionally "right way" to keep an emergency fund, but we are already being punished for doing things the right way for so many years (yeah, we don't qualify to get those stimulus checks). I am very thankful to be able to continue to work and be very comfortable as a Millenial... but it is just a backhand to the face how being so fiscally responsible has negative benefits now (why did I pay off our student loans??).

[sangkim]

In negative rates environment, banks also charge consumers to keep their money in the account. Negate rate encourage government to barrow more money (print more currency) and this can cause massive inflation. If you borrow like US government (3 trillion dollars in past 7 weeks) value of the currency drop so much that it could trigger hyperinflation. That negative rate have to change to to positive real quick otherwise it would trigger hyperinflation. Watch the money velocity, with lockdown taking place economy is pretty much dead and the FED can print massive amount of money and it will not effect economy. But if money velocity picks up watch out!

[misterkeebler]

One of the few videos i've seen that actually explained how negative interest rates can play out in real life. Most other vids have tons of people in the comments completely confused on how it works. This vid isn't one of them. Great job

[StockInvestmentAnalysis]

Powell has already said we won’t be moving toward negative interest rates. I appreciate the explanation and video!!

[hlegar]

Thank you Rose, you just became my unofficial finance advisor, waiting to hear your comments about gold investment.

[tsto]

You sound like a long-term investor! I appreciate your channel! Brings all the chaos back to earth in a calm, digestible video!

[InvestwithRavi]

Insane world to get paid to borrow money. Where is this money coming from ? I wonder what our future will be like due to this. Insane!

[kaf]

I’m very glad to have found your channel, Rose!
Thank you for not having music on this one.

[TesSheen]

US in general, both the govt and it’s citizens have debt problems. Where else in the world do you see rent to own furniture stores, pay day loan stores? Negative rates could easily plunge ppl into more debt.

[yukon]

I always leave your vids feeling better informed even if it's stuff I already know. You explain things with just enough detail to make it easy to digest. I look forward to your next installments just like it's a good weekly tv show. 😁

[SleepingGiantAfrica]

The unemployment rate in the Euro Area is very high when compared with that of Japan, and growth throughout the region has been very lacklustre as a result of austerity measures working to undermine any stimulus that may have been provided by negative interest rates. Southern Europe is effed. So I would think twice about that comparison.

Great video besides that, your analyses and advice is top notch as always!

[andersstorgaard]

In Denmark we have had these negative rates before the current crisis. The Main effect have been that the Banks are collecting rates from savers when you hit a limit of abort 50.000 dollars in your savings account, it's perverted. My answer is to invest more. What would you do?

[POINDXTRMUSIC]

The Fed specifically said yesterday they will not go below zero

[danvaida]

You're so right, we live in a society that has a debt issue.

[Swiftielife]

Love how you break it all down so I can understand it 💕❤️💕❤️ So sweet how you say bye. So caring. You stay safe and be well also. 🤗

[Michael-njum]

Rose, thank you for this video!
I was very confused when I heard about negative interest rates, but youve cleared up this confusion!

All the best :)

[soniatobias]

Yes! I agree and appreciate you mentioning that we need to understand the financial system as a whole and need to find alternate sources of investments until all of this plays out. I have been thinking of it as having my hands in all of the honey pots, lol, but I like your more mature approach to store your money elsewhere, like gold and bitcoin. I look forward to your video about fiat, money printing, and alternative ‘places’ like gold and crypto. Smile....