QE 2 is supposed to end this summer.
What do you think the effect will be on the:
- Bond market
- Stock market
Thoughts, opinions, strategies....
Actually QE ended in Oct 2014. Over 3 years ago.I'm resurrecting this old thread because I think the topic is pertinent as we go into 2018 and beyond. If the moderators think I should start a new thread I'll do so.
I guess at this point the quantitative easing is complete and we're now into the quantitative tightening as some have called it. I suspect the process may have an adverse impact on the stock market.
What are your thoughts?
I'm resurrecting this old thread because I think the topic is pertinent as we go into 2018 and beyond. If the moderators think I should start a new thread I'll do so.
I guess at this point the quantitative easing is complete and we're now into the quantitative tightening as some have called it. I suspect the process may have an adverse impact on the stock market.
What are your thoughts?
Ten years later and we are still finding consequences of the housing/financial bust to worry about. In the interim, I've gone from a young retiree to an old woman facing her 70th birthday. With very little in the market, I've increased wealth by 50% since I retired. (If I had been fully invested that would probably be close to 100% or more.) I just can't worry about every little coming and going of these never-ending consequences.
Not only is the Federal Reserve not purchasing as many treasuries and mortgage-backed bonds now while they are unwinding QE, but the US Treasury is issuing a lot more debt than they have in prior years. So both things put pressure on bonds and thus interest rates.
IMO the huge 2013 rally was asset inflation due to the last QE stage. That had to come out sometime.
And rising rates hurt stocks as they ultimately have to compete with bond and cash yields. Look at which stocks have been hurt the most - REITs, utilities and preferred stocks.
Until now, for the past year, inflation has remained stubbornly below the Fed target. So the equity party continued while the Fed scratched their head at the low inflation readings. Now suddenly the picture is changing and investors have been scrambling.