Wednesday, April 9, 2014

The Economy - It's The FED To The Rescue

With barely a day after a large sell off, the stock market has rallied thanks to statements by the FED that interest rates will not be rising any time soon. Why is that good news? It's not a surprise statement from the FED. They have been saying as much for weeks now. So why the rally? Maybe it's because the markets are addicted to low interest rates. When things start looking bad, the FED reminds the market that their drug of choice (low rates) will not go away, and they keep buying. At some point interest rates will rise (they have to eventually) and it is going to get ugly. It will be like an addict going through withdrawal. Ouch!

What do you think?