Nasdaq · August 9, 2011
The day the Fed promised two years
+5.29%
single-day change vs previous close
Part of a longer stretch
Five months around a downgrade
midway through · 2011-04-29 → 2011-10-03, -18.71% over the whole period
What happened that day?
- The Nasdaq rose 5.29% on the day, right after a heavy fall on the downgrade shock
- The Fed said it would hold its policy rate at this level at least through the middle of 2013
- Naming a date was new. The method of announcing the path ahead in advance is called forward guidance
- It is a tool that costs a central bank nothing. Knowing money will stay cheap makes firms invest now
- The Nasdaq swung several percent a day through this period, the typical look of a market that has not chosen a direction
- The actual bottom came two months later, in early October
Sources
Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.