Oct. 29, 2014 marked the end of the Federal Reserve’s historic program of quantitative easing, or QE, which created more new money in the past six years than in the entire history of the Republic. Easy-money has caused the U.S. stock market to soar. Beginning in December of last year, the Fed gradually retreated from its monetary generosity by tapering its purchases of Treasury and mortgage bonds to the point that quantitative easing is, at long last, now over.
The preceding paragraph reflects the conventional wisdom; the global financial media have printed hundreds of similar paragraphs over the last few months.
However, the conventional wisdom contains one false statement, one misleading statement, and one myth:
What’s false? QE is over.
And what’s misleading? The monetary tightening of the QE “taper’ was gradual and has ended.