A Look At How Fed Intervention Has Impacted Markets

This is a great chart from Doug Short that examines the impact of Fed activity on markets:

Of particular interest is the market anticipation before the start and the end of the Fed’s intervention.  As Mr. Short points out below, the announcements by the Fed gave some early indication of things to come.

“If a picture is worth a thousand words, this chart needs little additional explanation — except perhaps for those who are puzzled by the Jackson Hole callout. The reference is to Chairman Bernanke’s speech at the Fed’s 2010 annual symposium in Jackson Hole, Wyoming. Bernanke strongly hinted about the forthcoming Federal Reserve intervention that was subsequently initiated in November of 2010, namely, the second round of quantitative easing, aka QE2.”

We continue to closely monitor the Fed’s actions and impact on our markets.

Fed Intervention and the Market: New Update
Doug Short
DShort, April 10, 2012

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