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It is pretty much acknowledged that the fed tried to smoke out the savers like our military did to al queda in tora bora back in 2001. The idea was to make the interest rates so low on savings accts/CDs that the normally conservative savers/investors would go up the yield and risk curve in search of better returns. Also the new money generated by QE had to go somewhere and it largely ended up in equities on both foreign and domestic front. I am not exactly complaining about it as it has worked out very well for my 401K and other investements but it is what it is.
From today's article on Fidelity:
"The stock market is expecting a massive new economic boom, with accelerating growth, widening prosperity and expanding profit margins. Meanwhile, the bond market sees the economy remaining in a funk, with slow growth, widespread unemployment and low inflation.
Obviously, they can't both be right. Ominously, though, they could both be wrong. For the first time in 50 years, U.S. investors in a balanced portfolio of stocks and bonds face the near-certainty that they will lose money on a large chunk of their investments, after accounting for inflation — and a significant risk that they will lose money on all of them."
And this:
"There is a reason for this paradox. The Federal Reserve. Fed Chairman Ben Bernanke is engaged in a deliberate policy of driving down short- and long-term interest rates as low as possible to boost the economy and forestall a slump. The policy, known as quantitative easing, involves effectively printing billions of dollars each week and buying up Treasury bonds. It is a policy designed to fight the economic slump by inducing euphoria — akin to riot police hitting an angry crowd with a large dose of laughing gas."
Hilarious!