QuantitativeExhaustion

US FEDERAL RESERVE DICTATES MARKETS BEHAVIOR

FX:SPX500   S&P 500 index of US listed shares
Chart describes relationship with Federal Funds Rate X Federal Reserve US Bond Holdings vs. S&P 500            


Increasingly throughout the years markets behavior has been dictated by actions of US Central Bank Federal Reserve .

Following actions and words of Federal Reserve officials have been important elements in forecasting overall market behavior and direction.
nahidik PRO
10 months ago
Good research thanks for the insight.
Reply
avento
9 months ago
Very interesting...
if I understand correctly, before 2008 year the Fund Rate always tried to follow the market trend. After that, rate has been zeroed, and markets start to follow a growing monetary base. And from that moment it is interesting to see chart of S&P and FED BASE overlayed on one another (because they are correlating very well).
But today base is not expanding, at least officially, and rates are still zeroed.
So, FED tries to control effective fund rate via revers REPOs which volume tends to decrease (thus decreasing the real rate)
https://research.stlouisfed.org/fred2/series/RREPT
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avento avento
9 months ago
... I meant "volume of RREPT tends to decrease from beginning of 2016, with the consequences for Dollar index"
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