This Week’s FOMC to Mark End of Stimulus

October 27, 2014 Share Print 0

The Federal Reserve is expected to close a chapter in history this week and announce the conclusion of its massive stimulus program. Known as quantitative easing, the program is widely credited with driving investors back into stocks in the aftermath of the financial crisis.

“I think to some extent quantitative easing has provided an assurance to investors that (has) kept them optimistic,” said Bruce McCain, Chief Investment Strategist of Key Private Bank in Cleveland, Ohio. “Now we’re going to have to see whether investors can ride without training wheels.”

While there has been some chatter on Wall Street that the Fed would delay the expiration of stimulus due to concerns about weak growth and dangerously low inflation abroad, most analysts envision the central bank halting its bond purchases next month as previously signaled by Fed Chairwoman Janet Yellen.

“She hasn’t wavered, everything she’s said she’s going to do, she’s done it,” stated JJ Kinahan, Chief Strategist at TD Ameritrade, of Yellen. “Her job is not to make the stock market go up. It’s to keep the economy stable, and in her view the economy is strong enough.”

via SOURCE

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.