One of the primary objectives of the Federal Reserve’s monetary policy of this past decade was to generate the “wealth effect”: by artificially driving valuations of stocks and bonds to nosebleed valuations, American households would feel more prosperous, therefore, be more inclined to borrow and spend, even if some households did not own financial instruments.
In other words, a Central-Bank-free-money-anything-goes-induced ‘economic recovery’ was supposed to trigger fast-paced economic growth, as households would reignite the service-based economy.
