The Fed Funds Future Market is expecting the Fed Funds Rate which the Fed directly controls to go negative by June 2021 if not sooner. President Trump is also asking for the Fed to cut short-term rates below 0%. JP Morgan Chase's Strategists said, "Mildly negative rates such as -10 bps for a year or two could be beneficial in the current conjuncture."
Former Fed President for Minneapolis wrote in a Bloomberg opinion piece that The Fed should stop being such a drag and fight unemployment more aggressively. It should be looking to push rates into negative territory, maybe deeply. Even if the economic effect is weak, it's worth it. The Fed has a mandate: Achieve maximum employment and stable prices. If inflation is low, there's nothing difficult or bad about easing monetary policy to get more people back to work. WOW!
Fed Chairman Powell disagrees with using negative interest rates as does Dallas Fed President Robert Kaplan. St. Louis chief James Bullard reiterated his skepticism and Minneapolis's Neel Kashkari said: "there are other tools we would use first." Two of their colleagues a day earlier made similar comments.
So, will the Fed take short-term rates negative? I believe they will and remember Alan Greenspan said in the past few months that this could be a good policy step for the Fed; thus giving the current Fed Open Market Committee "cover".
How would this impact mortgage rates? It's hard to say as of now. Theoretically, we should see lower mortgage rates. But, inflation is the Arch-Enemy of bond investors and if they believe inflation may get "out of control" bond prices will drop and rates will rise.