Fed quantitative easing might crash the market đ
đ Excessive Fed tightening, achieved through raising interest rates, can crash the stock market by increasing borrowing costs for businesses and consumers, reducing corporate profits, raising the burden of corporate debt, and triggering global economic instability.
However, while it's a common belief that stock markets often respond positively to interest rate cuts, markets may experience a delayed negative reaction like in 1991, 2001, 2008, and 2020 đ
Fed starts cutting interest rates â> a few months pass â> market begins to fall as rate cuts continue. This scenario has played out many times already.
Balancing excessive tightening and easing is a difficult task for the Federal Reserve, and it hasn't done it well enough lately đ«
