Did you know that Shakespeare was a proponent of quantitative easing?
Sure! Go look at The Merry Wives of Windsor, act 2, scene 2. He says, “If money go before, all ways do lie open.”
And the Federal Reserve, the ECB, the Bank of England, and now the Bank of Japan all seem to agree that spending money can open up the path to increased economic activity…or at least that it’s worth trying. So all of these central banks are now back in balance sheet-expanding mode, buying assets to keep rates down. And equity markets loved it, but now that the initial intoxication of all that QE has hit the system, it’s time to look back at the data. That’s where we’re going to see the improvement…if it comes. Reviewing last week’s data, it’s still a mixed bag. Manufacturing activity, based on the Markit flash PMI readings, was up slightly in China, down in the Eurozone, and stagnant in the United States. Housing data – at least in the U.S. market – has continued on its strong path; though don’t expect it to hit its pre-recession peaks anytime soon. And in the United States, jobless claims were down, but the four-week average ticked up. So, all told, it continues to be a slow recovery.
Though, maybe slow isn’t bad. In Romeo and Juliet, Shakespeare cautions the young couple with prudence, “Wisely, and slow. They stumble that run fast.” But, if we can’t muster a “running” economy, then maybe a quick walk would be a nice change of pace from this crawling. Be sure to check out our full economic recap here, as well as some further thoughts on the central bank moves and job expansion in a recession.