Proof that a little surprise can be quite big.
Ahead of the Federal Reserve’s decision on more quantitative easing there were three possible outcomes that could have threatened what is becoming a strong global equity rally. In short:
– Meeting expectations could have been seen as boring, leading to a sell off
– Not meeting expectations could have been seen as widely disappointing, leading to a sell off
– Exceeding expectations could have been seen as a sign that the U.S. economy is in worst shape than feared, leading to a selloff.
In the event, the Fed’s $600 billion by June was a tad more than expected but not enough to spook the horses. ”Slightly pleasantly surprising,” is how Jonathan Schiessl of wealth managers Ashburton put it.