Which Will Happen First: QE4 or a Fed Funds Rate Hike?

Current chatter among market analysts largely centers economic conditions in Europe and slower, but still robust Chinese growth, as the triggers behind the recent weakness in the S&P 500. As a counter to the Europe and China stories as the main causes of the weakness we’ve seen since September 18th, take a look at the following graphic. The figure shows the performance of the S&P 500 overlaid with the expansion in the Federal Reserve balance sheet. No doubt, there’s a fairly strong connection. When QE1 ended in June 2010, the S&P 500 declined around 15% from peak to trough (April…