The big news this summer is the first hint of how the Federal Reserve will bring Quantitative Easing, or QE, to an end. And many stock market investors panic at the mere thought of it ending. The problem is that those people are giving QE too much credit for the rise in stock prices.
Consider the following facts:
- First, QE has actually had limited impact on the real economy. The monetary base has jumped dramatically, but the M2 measure of money is still growing along its long-term 6 percent trend line.
- Second, QE .....