Big spending makes financial markets matter less

Meanwhile, longer-term interest rates rose substantially in the first quarter, enough to cause investment-grade corporate bonds to suffer their worst quarterly performance since the 2008 financial crisis. Yet this didn’t trouble the Federal Reserve even as some investors worried it would derail the recovery.

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.