One strategist who likely is pleased with the Federal Reserve for finally beginning to taper its asset purchasing plan: Wells Capital’s James Paulsen.
Paulsen said last week at the Wells Fargo 2014 Investment Outlook conference that quantitative easing “has not had much impact,” except for there now being $3.5 trillion in bank reserves that has not reached the economy, the Las Vegas Review Journal reports. The Fed, he said, “should have stopped (quantitative easing) a while ago.” In buying up $85 billion in bonds every month, the Fed has essentially been “screaming, ‘we are scared and you should be too,'” he said.
Paulsen also said the “good news is the recovery is looking normal” and similar to recoveries that occurred in the early 1990s and early 2000s. He thinks the recovery has another five it six years to run. He did say that he expects a “mini-crisis” sometime next year because of the Fed’s taper plan.