What the US Federal Reserve Board says after its two-day meeting concludes in Washington overnight has the potential to either prolong the remarkable resurgence of equity markets, or blow them up.
Then, in a direct response to the Fed unveiling an unprecedented monetary policy response – open-ended buying of Treasury and corporate bonds and mortgages and an enormous injection of liquidity into markets and banks – the market began surging. If the recession is deeper and more protracted than the markets are factoring in; if unemployment remains exceptionally high, corporate earnings remain depressed and insolvencies ratchet up there is a significant possibility that the ferocious rally of the past 10 weeks or so will be unwound.
The obverse – a deeper recession and a lengthier recovery – probably wouldn’t be as disruptive because it would imply larger and longer Fed interventions and the post-financial crisis history says that is the critical issue for investors, who see the Fed as underwriting their risk.
It’s time Main Street started a revolt if the Fed throw in any more money to save the stock market at their expense.
The market is addicted to stimulus, it’s too late for the Fed. All they can do is keep inflating the bubble, keep wealth inequality raging until it blows up again.
All that without reference to: the Plunge Protection Team - i.e sounds awfully like Trump and his henchmen engaging in market manipulation ... again.
nice pic of the most famous ground floor staff. how is it related to Feds? clickbait?
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