2004 FOMC meeting when then-Governor Donald Kohn said their “policy accommodation” was distorting asset prices

 Kohn said, “Most of this distortion is deliberate and a desirable effect of the stance of policy. We have attempted to lower interest rates below long-​term equilibrium rates and to boost asset prices in order to stimulate demand.”

Both Greenspan and Bernanke were in the room when Kohn said this. The record shows neither expressed any reservations. Kohn himself called the distortion “desirable.” 

So, by 2004 the Fed had made a full transition. Its leaders knew their low interest rates were distorting the economy and they liked it. 

Moreover, under Bernanke the Fed made a deliberate decision to ignore asset bubbles until they popped, seeing its job as simply repairing the damage.

We continue exploring William Chancellor’s forthcoming book, The Price of Time: The Real Story of Interest.

John Mauldin 15 July 2022

https://www.mauldineconomics.com/frontlinethoughts/forgotten-lessons

By boosting asset prices, policy makers aimed to buttress elevated debt levels and, via the wealth effect, increase confidence, consumption and investment. 

Satyajit Das, Bloomberg 3 januari 2018

https://englundmacro.blogspot.com/2018/01/central-banks-have-created-illusion-of.html

Donald Kohn on Controlling Inflation, Ukraine Effects, Volcker-Era Lessons

5 July 2022

https://www.forexfactory.com/news/1165765-monetary-policy-at-a-crossroads-donald-kohn-on