NEW YORK (TheStreet) -- On this Labor Day, European Central Bank President Mario Draghi is doing the heavy lifting for the S&P 500 (SPY) . The ECB, not the Federal Reserve, is currently the central bank pushing investors into riskier bets in the U.S. stock and U.S. bond markets. The ECB currency countries constitute the largest economy in the world. A substantial bond buying program from the ECB will boost the dollar further along with the prices of all U.S. assets, including U.S. stocks.
The Federal Reserve's third bond buying program or quantitative easing (QE3) has been much maligned for driving investors into riskier sectors such as the stock market, SPY, (VOO) , (IVV) and (DIA) . Yet, with the QE3 tapered out, guesses for the start of Fed funds interest rate hikes center around mid-2015. That means the Fed is starting to put the brakes on speculation. U.S. data on unemployment, corporate earnings and growth show a recovery in the U.S. in full swing, and stock prices are reflecting that. Thus, the Fed will be forced to raise rates sooner rather than later, which should be pushing up U.S. Treasury yields. But Treasury yields fell in August and Treasury bonds, (IEF) or (VGIT) , have been rallying. At the end of August, it was the potential of more monetary stimulus from the ECB that was driving U.S. bond prices higher.