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What Assets Perform Best During Quantitative Easing?


A look at a variety of assets to see how they responded to QEs and Twists.

MINYANVILLE ORIGINAL The Fed has done it again. Over the last four years the government has embarked on a variety of different stimulus programs. The Fed's main programs have been Quantitative Easing (QE), Zero Interest Rate Policy (ZIRP) and Operation Twist. ZIRP isn't anything more than a glorified jawbone, so we won't spend any more time analyzing it. Some people have lumped the Operation Twists and QEs into one big bond-buying stimulus category. But this is a mistake as the effects of these two operations are quite different and should be analyzed separately. This article will look at a variety of assets to see how they responded to the QEs and Twists.

Before we get started we must first define the programs' starting dates. There are a couple of different interpretations. November 25, 2008 is when the Fed announced QE1. The Fed started buying bonds the following week. The November 25 date is by far the most commonly listed as the start of QE. QE1 ended in March 2010. The Fed gave an extremely strong hint for QE2 in Ben Bernanke's infamous Jackson Hole speech on August 27, 2010 but the Fed didn't officially start buying bonds until early November. We'll use the August 27 date. QE2 ended June 2011. The Twists started on September 21, 2011.

Now that we have gotten the formalities out of the way, let's get right to the data:

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