Former Federal Reserve Chairman Alan Greenspan said negative interest rates have been seen around the world, and it's "only a matter of time" before it reaches the United States, the CNBC reported on Wednesday.
"We're so used to the idea that we don't have negative interest rates, but if you get a significant change in the attitude of the population, they look for coupon," Greenspan said, adding that investors should watch the 30-year Treasury yield, which could be a good indicator of what's happening.
The former Fed chair also noted that gold prices have seen a sharp rise, as people are looking for hard assets they know are going to have value in the coming years as they age.
U.S. President Donald Trump on Tuesday renewed criticism of the Fed's monetary policy, when he tweeted that the U.S. Fed "fails to act" when "Germany, and so many other countries, have negative interest rates," urging the Fed to cut rates.
"As I saw it, the combination of the trade war and the president's attacks on the Fed threatened to put the central bank in an untenable position," Bill Dudley, former president of the Federal Reserve Bank of New York, wrote in a Bloomberg opinion article published Wednesday.
"The Fed needs to be cautious that it does not inadvertently enable the president's trade war with China," Dudley said.
The Fed should push back to encourage better policy, not stand by and allow a recession, said Dudley.
New York Federal Reserve President John Williams, meanwhile, said in a speech Wednesday that low inflation is one of the central bank's most pressing issues and promised to use monetary policy to sustain economic growth, while not specifying whether he would vote for a rate cut later this month.
Fed officials have sent mixed messages over the central bank's monetary policy. On Tuesday, Federal Reserve Bank of Boston President Eric Rosengren said that the U.S. Fed shouldn't cut rates under the current circumstances, signaling he might vote against lowering interest rates in the upcoming policy meeting.
St. Louis Federal Reserve President James Bullard, however, said the central bank should cut interest rates by 25 basis points as the financial market has expected for a rate cut amid a global trade war. The next Fed policy meeting is scheduled for Sept. 17-18.