Positive interest rate consequences
Interest rates affect the ability of consumers and businesses to access credit. On January 30, 2019 the Federal Reserve said that it would keep its target range for its benchmark interest rate at 2.25% to 2.5%, the range it had announced at its meeting on December 19, 2018. When the Fed cuts interest rates, consumers usually earn less interest on their savings. Banks will typically lower rates paid on cash held in bank certificates of deposits (CD), money market accounts and regular savings accounts. The rate cut usually takes a few weeks to be reflected in bank rates. Negative interest rates are designed to combat deflation by encouraging people and businesses to borrow and spend money. Since this method has been implemented only a few times in the past, in very different circumstances, their effects are difficult to quantify.