The Federal Reserve has just ended their quantitative easing program. This was widely expected and shouldn't come as that big of a surprise. Rates are probably going to be low for a while. And the stock market is down notably. Buy the rumors, sell the news.
I mean, the markets are down a little bit, but most people saw this coming. I doubt it's going to affect the markets too much moving forward. Most of my stocks posted gains today, despite the news. On a related note, I think most people will ride out the low rates for as long as possible.
I think we will be a seeing a lot of ups and downs in the market now instead of the never ending gains. You just have to wonder how computerized trading will change to handle this.
I feel like this is the real test for the stock market and the economy today. After several years of QE, how will they hold up without QE? The economy has to grow and it has to grow without cash injections from the Fed. It's time to take off the training wheels.
It shouldn't be a surprise to anyone. However, can you believe the rates on 30 year treasury bonds? Remember many retirees rely on the 30 year bond rates and 30 year bond rate funds to help boost their income. Some older people, in the distant past, actually have individually purchased over $100,000 of 30 year bonds. Think about the 1980s when those bonds paid over 9% interest.
