Before investing, you should determine if financial reports and earnings are worth analyzing by testing their soundness and quality.
Total assets held by major central banks are above $20tn. While Fed’s balance sheet has stabilized, the balance sheets of ECB, Bank of Japan and Bank of China have been increasing steadily.
Of course, the reduction in Fed’s balance sheet, expected to effectively start in 2018, will have a material impact on financial markets – the recent spike in volatility might be seen as a sort of recognition of that fact.
But global monetary base is still growing, which will in the end limit the potential for higher rates going forward and sustain high valuations in financial markets.
Answer: it depends on the growth/inflation outlook, less so on the Fed’s balance sheet changes. Per UBS: