The mere mention of a SLOWING of FED asset purchases down from the current $85B a month would have risk markets convulsing, interest rates shooting higher. SO at the last FED meeting we had a STATUS QUO instead of any even mild change in FED actions and policy.
The predictions now for GDP and the REAL economy are weaker for the 2nd half than just earlier this summer? How can this be? New highs in the stock markets, near or record lows in junk bonds and yields in general?
Federal spending and FED asset purchases have replaced SOUND money and investment, which lead to REAL economic growth and solid job formation.....now RISK assets vs home owners equity are where the avg citizens wealth resides.......I don't like the sound of that....
I think the FED has now painted itself in a corner, the crack addict economy needs to know there will be NO change in the dose, or withdrawl symptons will surely be manifested.
We have the ILLUSION of a real economy and sound policy....imagine that.