The $4.5 trillion force that’s helping to fuel market swings

Business Finance

New York( CNN Business) The Federal Reserve’s rate hikes steal all the headlines. But behind the scenes, the Fed is conducting a $4.5 trillion experimentation. And it’s unsettling world financial markets.

Although economists debate the effect on the real economy, QE acted like a turbo booster for the stock market.

In October 2017, the Fed decided the economy was eventually healthy enough to start shrinking its $4.5 trillion balance sheet. So-called quantitative tighten accelerated to $50 billion a month in the fourth quarter of 2018 — precisely when marketplace volatility spiked.

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