The Dow Jones Industrial Average and the S&P 500® Index recently reached all-time highs. Yet, a seeming disconnect between the economy and the stock market exists. In this blog we focus on news events that clarify the economic situation and Fed policy and the apparent disconnect with the level of the major stock indexes. We also mention an item in the President’s budget proposal that is central to this region’s economy.
Fed Open to Expanding QE as It Counters Talk of Tapering. Faced with a disappointing jobs report for March, showing that just 88,000 jobs were created, and other economic data suggesting a summer slowdown, the Federal Reserve last week affirmed its $85 billion per month bond-buying program (quantitative easing, or QE for short). In addition, the Fed went a step further in its statement by saying “it’s ‘prepared to increase or reduce the pace of its purchases’ …a signal that