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On February 22, market analyst Marc Faber said stock markets peaked. At the same time, bonds may rebound. "I think we have made an intermediate top, and it could be a longer-term" one, he believes.Markets are "significant(ly) overextended." Bullish sentiment is extreme. "Everybody says 'sell bonds, buy equities.' And when everybody thinks alike, one has to be careful."
Recent Fed minutes gave readers pause. Divisive opinions were expressed. Hawks want QE ended or at least substantially reduced.
Concerns were raised about "potential costs and risks arising from further asset purchases." Complications may result.
Longterm policy accommodation risks inflation. "(F)urther asset purchases could foster market behavior that could undermine financial stability.""(I)t could expose the Federal Reserve to significant capital losses when these holdings (are) unwound."
"Several participants emphasized that the (Open Market) Committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved."
"(A) number of participants stated that an ongoing evaluation of the efficacy, costs, and risks of asset purchases might well lead the Committee to taper or end its purchases before it judged that a substantial improvement in the outlook for the labor market had occurred."
It's nowhere in sight. It'll deteriorate further before improving. It may do so significantly. Protracted Main Street depression continues. Bad policies produce bad results. Experimenting with near-zero interest rates failed. Nothing ahead looks promising.
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