Those who say the Fed has inflated an equity bubble are not telling the whole story.
I see five reasons why the stock market’s five-year rise may not be due to easy money alone.
Higher profitability and the US economy’s ability to move forward on its own are also important.
I often hear about the connection between the bond-buying actions of the US Federal Reserve and the rise in stock prices. Indeed, the two do appear to have moved higher in tandem. The S&P 500 Index is up almost 200% since 2009, while the Fed has added trillions to its balance sheet to provide the US economy with extra liquidity to fuel growth and create jobs.
I see five reasons why the stock market’s five-year rise may not be due to easy money alone.
Higher profitability and the US economy’s ability to move forward on its own are also important.
I often hear about the connection between the bond-buying actions of the US Federal Reserve and the rise in stock prices. Indeed, the two do appear to have moved higher in tandem. The S&P 500 Index is up almost 200% since 2009, while the Fed has added trillions to its balance sheet to provide the US economy with extra liquidity to fuel growth and create jobs.