Markets Are Sinking

Wikipedia CommonsIt’s nothing too dramatic, but the start of the week brings sinking markets.

US futures are off on the tune of 0.5%.

European markets are roughly in the same ballpark.

The big story that everyone is talking about is the article by Jon Hilsenrath in the Wall Street Journal about the Fed possibly beginning the first steps to unwind QE.

We laid out much of the debate surrounding the article here.

There’s a widely held belief (which is likely mistaken) that the Fed is largely responsible for the equity rally and that any sign of a real winddown in the extraordinary measures that have characterised monetary policy since early 2009 will be horrible.

That may be in error, but you can’t be surprised to see a little knee-jerk selling anytime something like this comes up.

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