The markets have been rising since mid-2009. DJIA is up 30+% in the last year. S&P is up 40+% in the last year. NASDAQ is up close to 50% this year. All of QE-Infinity is completely priced in. Yet Obama is still in the mid 40’s.
The following is not mine and is from: http://www.learnbonds.com/qe-raises-interest-rates/
What is unique about this particular case is two things:
1. As the Federal Reserve buys up treasuries, they are simultaneously increasing the supply of money. More money chasing the same amount of goods and services increases the price of those goods and services. The market knows this, so when the Fed embarks on QE, inflation expectations increase, sending interest rates higher.
2. More money available to buy goods and services should also mean a pickup in the economy. As people adjust their growth expectations they pull money out of super safe assets like treasuries, and put that money into riskier assets like stocks. This is why the stock and bond market normally have a negative correlation. When the stock market is going up the price of treasuries is normally falling, meaning interest rates are going up.