Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.
Ben Bernanke, Washington Post Op-Ed, November 4, 2010
Bernanke’s statement above lays out the purpose of QE as he sees it. It is all about the stock market and creating a wealth effect. So how effective has QE been in moving stocks? Below we detail all the different phases of QE along with any subsequent pauses along the way. We also detail how the stock market has performed in each phase.
Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.
Ben Bernanke, Washington Post Op-Ed, November 4, 2010
Bernanke’s statement above lays out the purpose of QE as he sees it. It is all about the stock market and creating a wealth effect. So how effective has QE been in moving stocks? Below we detail all the different phases of QE along with any subsequent pauses along the way. We also detail how the stock market has performed in each phase.
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