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
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.