In a Santelli Exchange interview exclusive to CNBC Pro subscribers, John Taylor warned of dire consequences if the U.S. follows in the footsteps of other major nations by adopting negative interest rates.
On negative rates: "I don't want to go there, I don't think we should," Taylor said.
He added, "It causes squeezes on certain institutions and financial markets. ... You don't know all the implications. Look what happened in Japan. [Bank of Japan went] to negative rates and everything went backwards."
John Taylor is a professor of economics at Stanford University. He served as undersecretary of the Treasury for international affairs from 2001 to 2005.