http://money.cnn.com/2013/12/18/investing/stocks-markets/?iid=EL
In this article the Fed's influence on the market is discussed. The effect on the stock market was positive after the Fed announced that it would taper its bond purchasing. The Dow jumped over 290 points which was surprising to many after the negative effects that occurred in May when the Fed hinted at tapering. The Fed has strong faith that the economy will continue to create jobs and that it no longer needs as much stimulus. This confidence, therefore, could be a large reason why investors responded much better than they did in May. Do you think the markets will continue to respond well even with further tapering coming in the future?
I do believe that the markets will continue to do better, because if the Federal Reserve keeps to their promises, more people will see that as confidence in the economy and begin investing again. The Fed has also promised to raise interest rates later on, and for investors, seeing that the Fed is keeping promises, they will start an upward cycle of short term investments for a positive yield curve that could improve the economy and help recovery even more.
ReplyDeleteI also agree that the market will continue to improve. Moving further and further and futher away from the crisis of 2008, as long as there are no large problems or downfalls in the economy, confidence should only continue to rise. This continuing confidence in investors should ultimately help the economy continue to grow.
ReplyDeleteThe Federal Reserve Bank is correct to assume that the economy will grow faster in the future. Between 2010 and 2020, the BLS estimated that 20.5 million jobs will be created. Furthermore, our economy is adjusting to changing demands as our society is getting older, and certain industries are growing a lot faster. For example, the health care industry has been increasing recently, and is estimated to grow in the future. This is just one example of growing industries that will likely help the American economy grow in the future.
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