Quote:
Originally Posted by tabs
What happened to Equities when the FED announced Oe3 in Sept 2012....Equities went up up up...
What happened to Equities when the FED changed policy to a Neutral stance and were reducing liquidity by reducing their balance sheet in 2018. Equities cracked and by years end were collapsing...in the face of that great Trump economy..which should not have happened if the economy was so good an rock solid.
Which makes that Trump economy nothing but bloviation.
When the FED changed back to monetary activism..why everything became swell again with Equities...hitting new highs.
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QE is not the same as an interest rate cut. They were adding money to the economy and then " buying" the excess. If all the increased spending (bond sales) had hit the market the rates would have climbed. More supply than demand would require higher rates to push the sale of the excessive amount of bonds hitting the market. The opposite of what is needed during a recession. Spending was the problem. Not the fed lending rates.
Far different than a simple interest rate cut. You are barking up the wrong tree. Lowering the fed lending rate to match economic realities is not "juicing" the economy.