I thought the stock market was perpetually up because most stocks are traded among institutional investors that can borrow from the Fed, and the Fed is keeping lending rates low...
Maybe, sort of. Institutional Investors can’t borrow directly from the Fed, banks have to intermediate and they don’t always react the way the Fed expects. My theory is that leveraged investors (certain types of Hedge Funds) are impacted by changes in liquidity driven by Fed balance sheet changes. I wrote it out in this thread above.
I thought the stock market was perpetually up because most stocks are traded among institutional investors that can borrow from the Fed, and the Fed is keeping lending rates low...
Maybe, sort of. Institutional Investors can’t borrow directly from the Fed, banks have to intermediate and they don’t always react the way the Fed expects. My theory is that leveraged investors (certain types of Hedge Funds) are impacted by changes in liquidity driven by Fed balance sheet changes. I wrote it out in this thread above.