For the past five quarters – in fact, for the past five years – stocks have trended relentlessly higher with only minor interruptions.
Most recently, those brief stock market corrections have been tied to the Federal Reserve’s talk of “taper” – the winding down of its quantitative easing (QE) program. Under QE, the Fed has systematically purchased $3 trillion of U.S. Treasury and Agency bonds, pushing bond yields down to stimulate the housing market, principally, and the economy more broadly.