by Jim Nelson, CFA
Yesterday, the Federal Reserve went pedal to the metal on monetary policy by announcing an open-ended bond buying plan. The past few weeks’ rally in asset prices was vindicated by the announcement. Last minute doubters who believed that the FOMC would remain on hold were proven wrong. With the doubters on the sidelines, equities and resources have responded with strong upside moves. The important lesson to learn is that the real economy is playing less of a role in asset price performance as monetary policy offsets deleveraging forces.