Economics
Empty Punchbowl Leaves Central Banks Powerless to Bolster Stocks
- Wealth effect is withering as central banks stay easy
- Stocks drop after moves to spur global economic growth
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Central banks are past the point of having to worry about withdrawing the punch bowl before the party gets out of hand. It’s already running dry.
Where once-continued easy money would have been a recipe for rising stocks, the Federal Reserve’s decision not to end its zero interest rate policy last week sent stocks tumbling.