The quantitative easing game of chicken is at work, as QE withdrawal is back as a concern with stocks approaching all time highs. When should the U.S. Federal Reserve raise interest rates is a question which came first, the chicken or the egg? As the Fed watches the U.S. stock market improve recently, it determines that the environment for rate increases might be upon us. But the reason the stock market has been climbing is due, in part, to a dovish attitude regarding interest rates. When stocks were falling over the past three quarters, it was due in large part to…
On This Page
- Fed likes real estate market more than stocks, as recent stock rally due to expectations of a dovish Fed
- Virtuous cycle: As stocks began to recover, the Fed began thinking about raising interest rates creating a "QE trap"
- What is really happening with QE withdrawal is an addiction is being addressed, and an intervention may be required
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