The markets' QE-driven rally will sputter out

The major equity indices have risen rapidly over the past few weeks since the US Federal Reserve opened the door to another round of quantitative easing. But how long will the rally last?

"Don't fight the Fed" is the "mantra driving financial markets" now, say Michael Mackenzie and David Oakley in the FT. Major equity indices, along with other risky assets, have risen rapidly over the past few weeks since the Fed opened the door to another round of quantitative easing (QE) bond buying with printed money in order to shore up lending and growth.

Stocks got a further boost last week after yet another poor US employment report made more QE seem more likely. The Japanese and British central banks also look set to "add more punch to the bowl", says Danske Bank's Allan von Mehren.

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