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Mark Dow: The Bears Are Making Stuff Up About Fed/Treasury Plumbing To Excuse The Fact That They Were Wrong
Forward Guidance
Effects of Quantitative Easing and Interest Rates
The impact of quantitative easing on long-term interest rates does not conform to traditional expectations, with periods of quantitative easing often coinciding with rising interest rates instead of falling. The causality between stock market performance, interest rates, and monetary conditions is complex and not always straightforward. While there are theories about how loose monetary conditions can lead to a need for interest rate hikes due to an overheating economy, such scenarios are not commonly observed in practice. The actual effects of quantitative easing on interest rates are minimal, with the yield curve being more responsive to economic expectations and growth indicators. Critiques of quantitative easing often stem from individuals defending their worldview rather than empirical evidence, as predictions about the impact of quantitative easing have frequently been proven wrong. Additionally, the appeal of critiquing policy decisions often lies in the psychological need for hierarchical validation and the desire to feel superior to others.
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