A lesson learned after the 2008 financial crisis was that financial market shocks can turn into real economy shocks if they’re not nipped in the bud by policymakers. That led to a decade of the public grudgingly accepting—but resenting—an environment of slow economic growth where central banks were seen as the first responders for any little disturbance in financial markets.


Now, here we are in a quarter with plenty of financial market shocks while the Federal Reserve has done nothing to step in, and yet economic-growth expectations are stronger than they were at the end of 2020. The reason—which is a glimpse into the future for our shifting policy approach—was the trillions of dollars of spending passed by Congress that promises to expand the economy regardless of what’s happening in financial markets.


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