There is little chance the US Federal Reserve will take interest rates into negative territory even as financial markets have begun pricing in such a move for the first time, fund managers and economists said on the Reuters Global Markets Forum.
Fed funds futures, which are a gauge of where markets expect the Fed's benchmark overnight lending rate to be, are now pricing in a slightly negative rate environment beginning in December.
Under a negative rate policy, financial institutions are required to pay interest for parking excess reserves with the central bank. Excess reserves refer to surplus cash beyond what regulators say