Morning Report – Did QE inhibit lending? 9/19/14

Markets are higher this morning on no real news. Bonds and MBS are up small.

Not a lot to talk about this morning – Alibaba raises almost $22 billion in its IPO, and the Scots reject independence.

The Index of leading economic indicators came in at .2% for August, a drop from the upward-revised 1.1% in July and Street expectations of .4%.

Did QE actually inhibit lending? David Kelly, chief global strategist at JP Morgan has an interesting theory – that QE pushed rates so low, that it didn’t make sense for banks to lend money at such low levels. He also mentions the Administration’s war on the financial sector, which probably has more to do with it. But he has a point – when the government meddles too much with interest rates, you are going to have unintended consequences.

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