Now the talk is that by doing less, the Fed could trigger a market collapse.
I suspect there are limits to how high US rates will go when the Fed is on the sidelines.
The US economy’s forward momentum should also continue to support the stock market.
The US central bank, the Federal Reserve, is the subject of criticism, no matter what it does. It has been roundly criticized for making money too easy and creating bubbles everywhere — in short, that its actions aren’t working. If its actions are working, then the talk is that this artificial support will have to be removed, and the Fed will trigger a market collapse by doing less.
I suspect, however, that the easy money accusation against the Fed — and the implication that stock prices have to fall without its efforts to keep rates low — may be erroneous. Here are my reasons: