Corporate earnings forecasts for the second quarter were lowered so much that companies are easily beating them.Market Insiderread more
The central bank is not normally in the business of easing into an economy that is showing few signs of a recession, generally holding fire until more pronounced signs of a...The Fedread more
His case for gold comes as central banks get more aggressive with policies that devalue currencies and are about to cause a "paradigm shift" in investing.Marketsread more
Challenging conditions in the U.S. housing market, along with tighter currency controls by the Chinese government, cause a stunning drop in foreign demand for American homes.Real Estateread more
House Speaker Nancy Pelosi says she wants her chamber to vote on a debt ceiling and budget deal by July 26.Politicsread more
Philips has acquired a start-up that texts you about your poop. That's Medumo, a Boston-based company, which works with hospitals to guide their patients through common...Technologyread more
The "'Cadillac tax," set to go into effect in 2022, is unpopular with both Republicans and Democrats, who say it punishes the middle class.Health and Scienceread more
The declaration comes days after a case of the virus was confirmed in the Congolese city Goma, which borders neighboring country Rwanda.Health and Scienceread more
Federal Judge William Pauley wrote in a court filing made public Wednesday that materials related to a campaign finance probe of Cohen should be unsealed — and denied a...Politicsread more
The U.S. economy continued growing at a "modest" rate in recent weeks, with consumers continuing to spend and a "generally positive" outlook overall even in the face of...Economyread more
CSX said it expects revenue to fall as much as 2% in 2019, well below a previous forecast of an increase of 1% to 2%.Marketsread more
Some central banks have cut interest rates into negative territory in an effort to eke out some economic growth, but the step could spur unintended, counterproductive outcomes.
"Negative rates could backfire," Francesco Garzarelli, co-head of macro markets research at Goldman Sachs, said in a note Friday. "At least some segments of the population could feel poorer, and less secure," he said. "Rather than lifting consumption and borrowing, ultra-loose monetary policy could perversely lead to an increase in precautionary savings and a slower economic recovery."
Read More Why yields may take another leg down
In an effort to ward off potential deflation and bolster nearly flat-lined economic growth, some central banks -- including the European Central Bank (ECB), the Swiss National Bank and central banks in Sweden and Denmark -- have cut rates into negative territory.
A big chunk of the government bond market has gone negative: JPMorgan estimated that in January, around $3.6 trillion worth of developed market government bonds—or 16 percent of its Global Bond Index—was at a negative yield.
That's something that can spur new problems, Goldman said, noting concerns that pension funds and insurance companies may struggle to meet guaranteed payouts.
"Today's very low or even negative fixed income yields often are not large enough to match future liabilities," Goldman said, noting insurance companies are generally assuming forward rates will be positive and above current rates. If low or negative yields persist, making guaranteed products work will become increasingly difficult, it said.
In addition, if banks' profitability takes a hit from negative rates, it could actually discourage bank lending, hurting efforts to revive economic activity, Goldman said.
There's also the risk of asset bubbles forming, Garzarelli said, adding the risk is especially high for "high duration" assets such as technology stocks and high-dividend-paying stocks, which already have "eye-watering" valuations.
Others also believe ZYNY, or zero-yield to negative-yield, may not follow the theoretical playbook in the real economy.
"Traditional economic theory suggests that low interest rates will encourage households to borrow more, both to acquire housing and also to favor present consumption over future consumption," Michala Marcussen, global head of economics at Societe Generale, said in a note dated Sunday. But in practice, it may not work as households are already relatively highly indebted, labor markets remain fragile and regulations have become more demanding, she said.
"Indeed, households may even opt to save more to compensate for low yields, and all the more so in ageing populations," Marcussen said.
Corporates also aren't really cooperating, using low yields to borrow to buy back shares or retire older debt, steps that don't help the real economy much, she said. Societe Generale also expects banks to use some of the proceeds of the ECB's new quantitative easing program to pay back euro-area debt and deleverage rather than increase the credit supply there.
"Yields could fall much lower and even deeper into negative territory," but that's no guarantee of an economic recovery, she said.
—By CNBC.Com's Leslie Shaffer; Follow her on Twitter