Stocks rises are mostly Fed-fueled but this is not QE – MM #189

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Stocks continue rising and ignoring depressing news. The Federal Reserve is the primary driver. We explain what the Fed is doing, why it is not QE and what’s next for stocks.

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  1. A quick history for Fed action: The Federal Reserve is not only moving rates but also modifying its balance sheet – squeezing and enlarging it once again.
  2. Repo market operations: The recent rise in the Fed’s bond holdings is of short term bonds – and this makes a substantial difference. The bank’s intervention to lower repo rates is therefore NOT QE.
  3. Stocks rally: Coronavirus, the global slowdown, and other factors are not stopping equities, at least not in the US. Can this continue?

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About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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