Maybe the government didn\u2019t need to spend so much money. Maybe the Fed didn\u2019t need to shoot their bazookas to keep the markets afloat. The problem with counterfactuals is that we\u2019ll never know.<\/p>\n
The reason most investors don\u2019t dwell on counterfactuals is that the stuff that didn\u2019t happen isn\u2019t headline-worthy.<\/p>\n
These aren\u2019t headlines you\u2019ll read in the financial media:<\/p>\n
THERE WAS NO RECESSION YET AGAIN TODAY<\/p>\n
THE STOCK MARKET DIDN\u2019T CRASH\u2026AGAIN<\/p>\n
ANOTHER MONTH AND NO FINANCIAL CRISIS<\/p>\n
However, it can be helpful to look back at some of the outcomes people were sure of at the time that never came to fruition.<\/p>\n
During the Great Financial Crisis the Federal Reserve took drastic measures to shore up the financial system as it teetered on the edge of collapse.<\/p>\n
They took interest rates to 0%. They implemented quantitative easing, which essentially involved buying assets from banks to shore up their balance sheets.<\/p>\n
Many pundits, investors and economists were concerned these actions would lead to much higher inflation (some said hyperinflation), a crash in the dollar and a potential financial crisis down the road.<\/p>\n
A lot of well-respected people even penned an open letter to Ben Bernanke<\/a> laying out their concerns over the Fed\u2019s actions.<\/p>\n The Fed kept interest rates on the floor for far longer than anyone could have imagined:<\/p>\n Short-term rates were anchored at 0% for much of the 2010s and a few years in the early-2020s as well. All in all, it was something like 8 or 9 years with 0% rates.<\/p>\n And yet\u2026we didn\u2019t have another financial crisis. Zero percent rates didn\u2019t lead to another recession. The economy was slow and plodding but that\u2019s what happens after a banking crisis.<\/p>\n As much as people talked about money printing in the 2010s, inflation remained subdued.<\/p>\n One of the main reasons for this is that the Fed wasn\u2019t actually printing money and sending it to households. They were buying assets from the banks and holding those assets. The banks weren\u2019t lending more money out to businesses and consumers so the asset swap simply shored up the banking system.<\/p>\n Inflation finally reared its ugly head in the 2020s because the goverment\u00a0did\u00a0send money to households and businesses. But that wasn\u2019t the Fed.<\/p>\n Despite a lot of complaints over the years, the Fed\u2019s actions didn\u2019t lead to a financial crisis. Yes, there was an impact on the financial markets because interest rates can change people\u2019s appetite for risk.<\/p>\n But there was no hyperinflation.<\/p>\n The dollar was stronger.<\/p>\n There was no financial crisis caused by monetary policy.<\/p>\n There were no recessions (outside of the brief pandemic-induced 2-month slowdown).<\/p>\n In fact, we just lived through the longest economic boom in history<\/a> and one of the longest bull markets ever<\/a>.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/04\/IEFFRND_chart-2.png\")
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