Tuesday, April 16, 2013

QE infinity could end when Bernanke leaves

"QE infinity" has driven markets to new highs but that rally could end when Bernanke leaves.

The message from me is that anyone who is different is a risk for the market. When we transition from one Fed chairman to another, things tend to happen. When we went from Volcker to Greenspan in October 1987, markets dropped up to 35 percent, so any change in that figure-head and chairman's role is a risk for the market.

The big one for me isn't so much in the detail of what the Fed might, or might not do in the next few months, it's the fact that Bernanke may well not be in that job come January next year.