Less talked about than QE, the Fed may be contemplating cutting the interest paid on reserves to...

|By:, SA News Editor

Less talked about than QE, the Fed may be contemplating cutting the interest paid on reserves to 0% (from 0.25% currently), suggests former Fed economist Ward McCarthy. The amount banks have deposited in Fed vaults has ballooned to $1.49T from $2.4B in 2007. Cutting the rate to zero might force the cash into the economy (or it might destroy the money market industry).