More recently, some Fed officials — most notably John Williams, the head of the San Francisco branch — have entertained the idea of raising the inflation target above the current 2 percent level. In theory, that would give the Fed more leeway before having to raise rates and effectively lower the real interest rate, or the level of nominal rates compared to inflation.
Bernanke said there are problems with that approach that do not occur with using negative rates.
"Negative interest rates are easy to implement," he wrote. "In contrast, while the Fed could announce at any time that it is raising its inflation target, the announcement would not increase the Fed's ability to lower the real interest rate unless the public's inflation expectations changed accordingly."
Bernanke said political issues also would dog the Fed in trying to raise the inflation rate.
Washington lawmakers, particularly Republicans, have been critical of the Fed's dual mandate — price stability and full employment — and want the central bank to focus solely on controlling inflation. The Fed might have an easier time politically with instituting negative rates.
"In the political sphere, the fact that negative rates would be temporary and deployed only during severely adverse economic conditions would be an advantage," he said. "Like quantitative easing, which was also unpopular in many quarters, a period of negative rates would probably be tolerated by politicians if properly motivated and explained."
The full text of Bernanke's post is here.