Agreed. The world's major central banks seem to have a fascination with propping up asset prices.
The US Fed stopped raising interest rates in December 2018 (which they had previously identified as the right course of action to correct distortions in the economy) when their stockmarket dropped by 20% and then Wall Street threw a tantrum. Just when some semblance of normality was beginning to return to markets, interest rates started to be cut and more QE was introduced. This sent stock prices much higher. Then when Covid hit in early 2020, more rate cuts came to further stimulate the economy, and drive up asset prices from already ridiculous levels to absolutely moronic ones.
In Australia, the RBA inexplicably raised rates three times within 4-5 months as soon as the Federal Coalition government was re-elected in May 2019. This was most likely because of political pressure, as the lending landscape in the lead-up to the election was a precarious one. Housing markets had begun to deflate in an orderly fashion, with those who were over-leveraged starting to feel the pinch, and supply slowly starting to trickle onto the market. That is how it SHOULD be. But along came the bookworm, Phil Lowe, to drive down borrowing costs, and ease the pressure on those imprudent borrowers once again. Then with the advent of Covid in 2020, came further rate cuts, QE and even statements from the bookworm that first borrowers should buy so they won't miss out. Along with the government incentives (essentially more free money) this created even more moral hazard and increased the risk in an already dangerously risky system.
Now that we have a huge inflation problem, let's see if they stop trying to game the system, and hike rates like they should, to combat what is a problem for everyone, at the expense of the rich who hold assets (and debt). Only then will natural market forces take over and asset prices come back down to earth.
