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Negative interest rates are less radical than they sound

The biggest monetary policy event coming up is likely to be next week’s ECB’s policy-setting meeting, not least because we think the Governing Council will cut its deposit rate to below zero. If so, this would be the first time that a major central bank has crossed the threshold into negative territory. However, there is nothing magical about a small negative interest rate, so this may appear a more radical step than it really is.

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