Written by Retirement Advisor Published December 25, 2025 · Last updated August 11, 2026
Quick answer: Negative interest rate policy (NIRP) means a central bank charges commercial banks to hold reserves, rather than paying them – a real policy tool used by Japan and the European Central Bank, but one the U.S. Federal Reserve has never actually implemented.
Where negative rates have actually been used
The European Central Bank and the Bank of Japan have both implemented negative policy rates in past years, intended to push banks to lend rather than hoard reserves. This is real, documented central-bank policy, not a hypothetical.
The real U.S. picture
The Federal Reserve has considered negative rates as a theoretical tool during past crises but has never actually set its policy rate below zero – the lowest the federal funds rate has been set is the 0%-0.25% range, not negative. A video suggesting negative rates are imminent or already happening in the U.S. is describing a policy that hasn’t occurred here.
FAQ
Has the Federal Reserve ever set U.S. interest rates below zero? No. The Fed has held its target rate as low as 0%-0.25% during past crises, but has never implemented a negative federal funds rate, unlike the European Central Bank and Bank of Japan.
0 Comments