Even casual Fed watchers must by now have taken note of the Fed’s announcement that it planned to begin tapering its monthly bond purchases around mid-November. Now, here we are. So far, the equity markets seem to be taking the news in stride – maybe because the current slate of Fed officials have been more transparent and communicated better than some of their predecessors.  However, with headline inflation now topping 6%, the highest in 30 years, the U.S. economy may be running hotter than Fed officials anticipated. And inflation may be looking less transitory than they hoped. For example, recent

What is quantitative easing (QE)? Quantitative easing is a monetary tool used by a central bank to help directly influence the supply of money and indirectly influence demand and interest rates. The Federal Reserve utilizes QE by purchasing assets, such as Treasuries and mortgage-backed securities (MBS), with cash from its member banks. Through this purchasing mechanism, the Fed increases market liquidity as well as weakens the dollar against foreign currencies with the hope of stimulating the economy. This injection of U.S. dollars makes it easier for banks to lend out capital as well as creates a more enticing investment environment