http://www.cnbc.com/id/100965205 http://www.nasdaq.com/article/feds-bullard-floats-idea-of-small-cuts-to-bond-buying-20130815-00888 Two days after Bullard says he sees no bubble, he offers the idea of small decreases to QE, which, of course, occurs the day after stocks decline 1.39%. OMG the world is ending now.
Well, stocks and bonds may behave differently to this. In the short-term, probably bullish for stocks, but bearish for longer-term bonds (10 and 30 year) if the market thinks this is long-term inflationary.
Fed stupidy just amazing they're doing the same mistake like 2004 when instead of large rate increase they did baby steps ensuring bubble grew huge size the same thing now - QE must stop now. ANd then they might have slim chance to normalize things and avoid major collapse and they should start raising rates next year Instead of that they will probably cut in September to from $85 to $80 or 75 bln. market expects cut to $65 so it will be huge rally then they won't halt QE till 2016. By that time bubbles will consume US economy entirely. 2008 crash would be seen just as a blip comparing to collapse Fed is creating now
The Fed is beholden to the banks. They do exactly what the banks want them to do. And so do the politicians, including the President.