U.S. Federal Reserve Chair Jerome Powell has announced

that the Fed will soon end its quantitative-tightening program. But that isn’t the bullish signal most investors believe it is.

Of course, the Fed’s decision is meaningful. The central bank has been draining a large amount of liquidity from the financial system, and since some of that liquidity otherwise would have found its way into equities, QT presumably has been a significant headwind for the stock market. Since June 2022, the Fed has shrunk its balance sheet by $2.2 trillion. It seems plausible that ending that program should provide a big boost for the stock market.