I imagine that the biggest result will be in the bond market; but I will not hazard to guess in which way.
They have been propping up government bonds, but has this taken investment funds away from other bonds; or has it artificially inflated the bond market that will now correct?
Bonds are an oddity, because as their price drops, *typically* their yield rises. However, if their price drops and their yield does not rise, it may cause a stampede out of bonds.
Commercial, taxable yields are more volatile, and market driven; and tax free municipal bonds are more stable, and based on the ability of cities to build new infrastructure. And because muny bonds are often medium and long term, even cities with financial problems continue to pay yields on them, so as not to destroy their credit.
That's the dilemma, isn't it? Should I move my investments out of bonds (which have been doing quite well lately) and move them to something like a money market fund?
Should I let my large and small cap investments ride? Should I move in or out of equities? Or is it just something no one can predict?
hmmmm, sounds like I should get out of everything.
And get a 1% CD. yippee!