High US unemployment 'good for market'

Smith & Williamson's Robert Royle and Tana Focke explained to Asset TV why high US unemployment will lead to more QE2 and boost markets.

There has been a lot of pump priming going on with QE2, do you think the macro position is unstable? Robert Royle (RR): Bernanke’s Jackson Hole speech, where he announced QE2 or the possibility of more QE, has been the main driver of markets recently. Bernanke explicitly said after he wrote for the Washington Post in December “higher stock prices will boost consumer wealth and help increase confidence. That, in a virtuous circle, will boost consumer spending.” So it is very explicit in terms of support to the equity markets. Then last month he said: “Until we see a sustained period o...