When will the Fed taper its multi-trillion bond-buying binge and let interest rates drift up again? That’s the to-be-or-not-to-be-in-stocks question worrying Wall Street strategists.
The Fed giveth, and the Fed taketh away the punchbowl, when its earlier largesse leads to inflation. Rates rise and the market crashes. But financial history never repeats itself.
The lingering COVID-19 pandemic will keep the economy weak for some time. The Fed will proceed cautiously. This year it probably will do nothing. It may be a bubble, but it’s not ready to pop.