The promise of additional funds pumped into US financial market made exchanges euphoric. Immediately, indices jumped by several percentage points. Economists believe this is the beginning of a new era of bullish market. Fund managers, however, are waiting for positive data from the economy while analysts warn that the enthusiasm usually evaporates within a day or two after Fed’s intervention. The capital injection from Fed may have a short-term influence on the markets.
Below some comments from analysts and fund managers.
“We should welcome the increases but they were boosted not only by Fed. Earlier decreases which went too dip are responsible as well. Fed acted according to its policy. I don’t support it. Experience shows that pumping money into the market often ends with losing the money. What’s worse: it may prolong the state US economy is in. That’s why I’d rather our stock exchange was more autonomic in its reactions and react more to European economy indices than the ones in the USA”, Wojciech Szymon Kowalski, Biuro Analiz I Konkunktur WS Kowalski analyst said.
“Fed’s decision is a short-term remedy. In a longer term it won’t work. I still expect that investors will react nervously at least till the half of the year”, Maciej Bobrowski, BDM analyst added.
“Fed’s decision won’t cure US economy. A small recession is still probable.
The move however, will improve the situation on the markets. Investors agreed
that recession is coming. The atmosphere was spoilt by fears that financial
institutions may go bankrupt. The decisions of central banks removed the fears
and if the tension disappears for longer, the markets may again grow”, Grzegorz
Latala, investment deputy head of CU IM fund said.