What Is Yellen Planning To Do To The Stock Market?

The Federal Reserve has a long history of manipulating the stock market indirectly through its changing of interest rates in an attempt to provide a continuously growing economy. Current Fed chair Janet Yellen has continued this policy which she inherited from Ben Bernanke and Alan Greenspan before him.

However, unlike Greenspan, Yellen’s Fed is considering taking a more direct approach to bolstering the stock market and stock prices: Direct purchase of corporate stocks and bonds, along with other purchases. Yellen said,

It could be useful to be able to intervene directly in assets where the prices have a more direct link to spending decisions.

Now, whether you consider this a move towards socialism and all of the economic baggage that socialism entails will depend on whether you believe the Federal Reserve is a government entity or a private corporation. Regardless, even the fact that the Fed is considering this option signals their concern over being able to continue to exert influence over the U.S. economy.

Unfortunately for U.S. citizens, it is unlikely that the Fed or the Federal government will ever acknowledge the natural cycles of an economy and will continue to try to manipulate factors for short-term benefit over long-term positive results.