The Federal Reserve has not yet determined whether it would be able to legally implement negative interest rates in the U.S., Chair Janet Yellen said.
"I would say that remains a question that we still would need to investigate more thoroughly," Yellen said Wednesday in response to questions from the House Financial Services Committee in Washington. "I am not aware of anything that would prevent us from doing it, but I'm saying we have not fully investigated the legal issues — that still needs to be done."
A 2010 staff memo posted on the central bank's website late last month cast doubt on whether the law that authorized the Fed to pay interest on excess reserves, or IOER, also would grant it the authority to charge interest.
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