Federal Reserve lowers interest rates to 0%, what it means for you

LA CROSSE, Wis. (WKBT) – There are a lot of questions about the future of the economy.

However, economists say it’s not all negative.

The Federal Reserve lowered interest rates to 0%, which is extremely uncommon.

But, surprisingly enough, this means there’s no better time to borrow money, buy a house, or even start a business.

Keep in mind though, if interest rates go under 0%, it has consequences on savings accounts.

When you put money into your savings you earn interest.

This is an incentive to keep money in your bank.

But if it goes under 0%,  you would have to pay to keep your money in your account, which means people would likely start cashing out.

“There’s a reason that we don’t pursue negative interest rates as a normal policy, you can imagine that if you have to pay money to leave your money in a savings account in a bank, you probably wouldn’t leave it there. You would have the incentive to pull it out and stick it under a mattress,” said Adam Hoffer, Menard Family Director, Midwest Initiative for Economic Engagement and Research/Associate Professor of Economics, UW-La Crosse

Hoffer says negative interest rates are possible, but unlikely.