ABSTRACT: The Federal Reserve officially ended its asset purchase program on Wednesday, although their outlook for a ‘considerable time’ before the federal funds rate is raised remained largely unchanged. U. S. markets made a positive reversal this week, pulling the global markets upward along with it. With the recovery of stocks, precious metals were battered to fresh lows.
GOVERNMENT & POLICY Farewell, QE (At Least Until After We Vote)
At long last, the Federal Reserve’s quantitative easing program has come to end. Following the meeting of the FOMC on Wednesday, the committee’s announcement about the conclusion of its asset purchases gave a more hawkish outlook for the economy than most expected.
There’s a reason for this, as it turns out.
With the midterm elections less than a week away, the Fed is probably being very careful not to upset the markets in any way.
As much as anyone may like to believe that the Fed is completely insulated from American politics, this is simply not the case. When an FOMC member makes a statement, it is not merely investors who try and read the tea leaves; the comment typically makes headline news, because the implications of the Fed’s monetary policy have political ramifications, as well.
This post was published at Deviant Investor on on November 1, 2014.
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