Effects of QE2 on the Stock Market

  1. andycool profile image71
    andycoolposted 5 years ago

    Do you think Quantitative Easing of US $500 billion if announced by the Fed will trigger a sell off in the stock market? What about US $1 trillion... if announced by the Fed will it trigger a rally?

    1. JR White profile image60
      JR Whiteposted 5 years ago in reply to this

      Well, QE is being done to prop up asset prices by increasing liquidity, so it is, among other things, intended to prevent the stock market from falling.  What will actually happen is anyone's guess. It's not a strategy that will put people to work, however, so long-term it is probably useless.  And last, increasing the money supply will hurt the dollar, create inflation and boost commodity prices, especially oil, gold, silver and other metals.

    2. davidbrian profile image61
      davidbrianposted 5 years ago in reply to this

      I believe it was actually $600 billion.  And I agree with JR White's response.