With so many market participants focused on Fed policies and their NEXT move, it is important to understand what the Fed can and cannot control. While the Fed sets SHORT-TERM rates and can use open market operations to control them, the free market sets LONG-TERM rates.
One of the stated objectives of the Fed’s Quantitative Easing program was to lower LONG-TERM rates. In theory it made sense, but in practice we saw long-term rates RISE during QE operations and then fall once those operations ended. In other words, QE had the exact OPPOSITE impact on long-term rates.