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What do people mean when they talk about the central bank providing “cheap money”? What are the implications for the stock market?
Newspapers write a lot about the central bank stopping "cheap money" in the US. What is that exactly and what are the implications for the stock market? An interest rate is simply defined as the price of money.  So if money is cheap, it must mean there is a low interest rate compared to normal.  If milk is cheap, we're comparing it to past prices or prices at competitors' stores.  Same with money. I don't think its fair to say just because the supply of dollars rises that the value of dollars will go down.  Value or price is determined by supply and demand, not just supply.  Its possible for the demand for dollars to be stronger than the rising supply, which would drive the price higher.  A good example of this is to look at the value of the dollar recently.  The Fed has been printing $85 billion per month, yet the value of them is going up compared to foreign currencies, gold, and just about everything.  Why? Because the Fed has merely threatened to stop, but it hasn't stopped.  That alone was enough to increase demand above supply.  So if you want to know what will happen, take a look at what IS happening. When cheap money ends, the value of the dollar will go up, interest rates will go up.  This will be a drag on the economy.  It will be more difficult for companies to show profits and earnings should decline.  In addition, those who have grown accustom to the easy money and have over-leveraged themselves (ie REITs) could go bankrupt.