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To: Rarebird who wrote (113428)	11/21/2020 9:17:56 PM
From: RetiredNow	Respond to of 116960

The difference I was talking about is the type of stimulus. If the Congress cannot reach a deal to provide fiscal stimulus, then the Fed will try to make up the difference (lack of $1-2 trillion in fiscal stimulus) by buying more bonds using QE. Over the past year, they have bought Treasuries as well as corporate bonds. If the Treasury asks for the extra money back, then that's less they can use to buy back bonds. I guess they can always print more money, ala QE, but let's see what they do. I think if we get a significant correction in stocks, then the Fed will step in with higher QE amounts. Not sure why Mnunchin asked for the money back, though. It's an interesting time to take the training wheels off when we are headed into a surge in COVID cases in this third wave and states are starting to lockdown, which means it may be the final nail in the coffin to small businesses and retail bricks and mortar businesses. So if the Fed and Congress don't step in to help, then there will be carnage in stocks. I hope not, but we saw what happened last time with lockdowns. If we do get a correction, then I'll buy those dips and hope the Fed or Congress steps in with a decent stimulus. Here's what I actually think will happen. First, the Fed will do more QE and announce it in their next meeting, which I believe in Dec 10th. Then we'll get a stimulus of around $1 trillion after inauguration. So I don't think we'll see more than a 10% correction over the next two months, but we'll see.