20 Jan 2016

The Connection Between the Stock Market and the Fed

Federal Reserve, Financial Economics, Shameless Self-Promotion 3 Comments

I notice that Roger Farmer has been following this. The below is the chart I put into my article in the September 2015 issue of the Lara-Murphy Report. I was pointing out how the S&P500 had big drops whenever a round of QE ended, and then again in August when (at that point) people were expecting the first rate hike the following month.

SAP500 vs Fed



That particular hike was postponed, of course, but since we’ve had the actual hike last December… Market is down 9% YTD as of the close on January 20.

3 Responses to “The Connection Between the Stock Market and the Fed”

  1. Maurizio says:

    This could be read as an argument for more QE 🙂

    • Baconbacon says:

      Only if the QE programs were expected to last forever.

  2. skylien says:

    Ok so this is what escape velocitiy looks like!

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