University of Nottingham Monetary Economics Facing COVID19 Paper

Question Description

I’m trying to learn for my Economics class and I’m stuck. Can you help?
 
This is a presentation about monetary economics. I need to make a speech of about 10 minutes. Refer to the textbook for Mishkin’s monetary economics(11th edit.)
Here is the topic:
There has been almost a decade of negative interest rates since the central bank of Demark firstly set the interest rates below zero in 2012. The bounds of how low rates can go has been pushed deeper throughout this decade (e.g. ECB consecutively cut the interest rate on its Deposit Facility from -0.1% in 2014 to -0.5% in 2019). Facing the crisis of the COVID19 outbreak, US Fed and Bank of England have also pushed their policy rate close to 0%. Is there really a limit to how low rates can go? Does policy that cuts rates into negative territory work just like cutting rates in positive territory? Why are some central banks reluctant to cut rates below zero? Do you think the Fed and Bank of England will further cut their policy rates to negative?
As a group presentation, my part is the last question: Do you think the Fed and Bank of England will further cut their policy rates to negative?