The Federal Reserve's latest easing program may be nicknamed "QE
Infinity" on Wall Street, but it's having a very limited effect on the
markets and economy so far.
Stocks have been flat to slightly lower since the central bank announced the third round of its quantitative easing program — QE3 — while economists remain pessimistic that it will achieve its stated goal of bringing down the unemployment rate.
Stocks have been flat to slightly lower since the central bank announced the third round of its quantitative easing program — QE3 — while economists remain pessimistic that it will achieve its stated goal of bringing down the unemployment rate.
Consequently, sentiment is beginning to build that the Fed may be running out of bullets.
"We've
been range-bound as everyone digests the information," said Robert
Laura, president of Synergos Financial Group in Brighton, Mich. "There's
nothing that's going to take us any higher. The headwinds out there are
too large for QE to overcome."
Previous
easing rounds have helped push up stock and commodity prices, but only
after rounds of volatility that Laura expects to occur again this time
but without the QE-inspired bounce at the end.
Laura pointed out that the first QE, which came at the depths of the financial crisis in November 2008, pushed the Dow industrials [.DJIA
13490.65
8.29
(+0.06%)
] up
400 points in a day and spurred a month-long rally. But the market then
began its death plunge until stocks cratered in March 2009.
8.29
(+0.06%)
] up
400 points in a day and spurred a month-long rally. But the market then
began its death plunge until stocks cratered in March 2009.
Read more: http://www.cnbc.com/id/49274085
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