Inflation: Who's lowering prices?
- Thread starter LanceJ
- Start date
QE has a particular effect on the equities market. QE at first pushes down and then holds down interest rates -- that's because bonds are moving to the government side and being replaced with additional bank reserves on the private sector side. Bond prices increase and bond yields decline. When bond yields are rock bottom, portfolios get re-balanced. People and funds look for alternatives to bonds. The equities' market becomes the beneficiary of the search for higher returns. The stock market goes up. When the market goes up, stocks get bought, and the market goes up some more!
QE is something the Fed does when they think the economy overall is in need of goosing. QE's particular effect on the equities' market can, at times, make equities appear out of sink with the rest of the economy.
I thought the Fed made a mistake by not tapering QE sooner once the Trump and then the Biden administration pushed through fiscal pandemic relief measures. The fiscal measures put new outside money (actual "printing") into the economy, whereas the Fed's QE goosed inside money expansion (cheap credit -- the intended effect--- and a goosed equities market --- the side effect.) We didn't need both more outside and inside money. One or the other would have been good. In retrospect, probably the fiscal measures and just holding rates steady where they were when the pandemic hit would have been sufficient. Recall that the fed had already embarked on tapering and a modest rate increase when the pandemic hit. The Fed then reversed course. It was this reverse that I think was the mistake. They should have just held steady once fiscal measures were being taken. (I thought Powell was a bad choice to lead the Fed -- he's a lawyer -- and he's not dissuaded me from that view. But like all Fed Chairs, he's had to learn on the job. Maybe he'll be better going forward.)
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ITS mid JULY,2022 \ + i've seen all those bids dropping + dropping..
Even more so if you like to shop around.
Dont shop 'till you drop \shop till price drops.
NOT sure what stocks you are looking @?? SPY,QQQ,IWM= DOWN down all year + as of 12;42 lunchtime \ still down for week.
Sorry; i dont keep up with landlords asking price \wow they got ripped off with virus rules.
Used auto bid ask+ new car bid-ask prices have always been transitory.
AND who on God's green earth though RE prices based on ''no appraisal/no inspection'' is anything but transitory??
Is there such a thing as live interest rate data?