L.A. Little says that despite the taper, there might still be more quantitative easing to come:
Looking back at the SPDR Gold Trust and iShares 20+ Year Treasury Bond ETF chart, there was one period during this ongoing experiment that is noteworthy and that is when both bonds and gold exploded higher during the first six months of 2011. Looking back, we know that QE1 underwent a tapering phase throughout late 2009 – 2010. But, the Fed reversed course in late 2010 and introduced another round of QE — this time focusing specifically on Treasury debt to push interest rates lower. By 2011, bonds and gold were leaping higher driving bond yields to historic lows.
If we fast forward to today, once more we are tapering again and QE3 should be finished up this year but if we look over to the gold and bond markets, both seem to be suggesting that our three experiments with QE may not be the end of it.
We’re addicted to stimulus.