Monetary Policy Provided By Federal Reserve System

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Macroeconomic sentiment Over the past couple of years we have seen a huge surge in stock markets (Chart#1). The main reason for such moves is Quantitative Easing monetary policy provided by Federal Reserve System since late 2008. Purchases were halted on 29 October 2014 after accumulating $4.5 trillion in assets or 26% of GDP. The key outlook is tend to be consumer behavior, because households’ spending represents two thirds of GDP, which is broadest measure of economic activity. The job market is considerably stronger right now. Since June last year, payroll employments expanded by $2.2 million jobs (Chart#2), which represents 2.4 percent annual rate of increase. As a result, incomes are rising rapidly. For the same period real…show more content…
One more reason for such situation is recently surged value of the dollar. Understanding the fact, that falling commodity prices and rising dollar cannot last indefinitely, and maybe even bottomed out for now, I see a lot of perspectives within these markets in one year period. Moreover, a lot of forecasters expect inflation to move toward two percent goal during this year, which will result in substantial rise in commodity prices. Although, it is a controversial issue according to the FED projections for the current and the next year, which have been lowered from previous numbers (Table#1). In this case, Fed is unlikely to tight money supply by increasing federal funds rate, which is currently zero and is a frequently debatable topic. Such policy has a positive impact on a stock market. Securities-specific news 3D Systems Corporation (NYSE:DDD) represents one of the most innovative industry in recent years and since its highs in 2014 has fallen more than fifty percent. Anyway, the company shows steadily growing revenues as well as high liquidity ratios. Moreover, the five-year earnings per share growth is at 21.67 percent, which gives investors benefits than other competitors can provide. The company has manufacturing facilities in the United States, Germany, the Asia-Pacific, and other European countries. DDD declared the buyout completion of Cimatron ltd., which is one of the leading CAD/CAM software solutions providers and gives DDD a lot of
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