Fed boosts stocks, ECB favors exchange rates: Asymmetric monetary policies revealed.
The Federal Reserve and European Central Bank had different reactions to stock market changes from 1979 to 2009. The Fed under Greenspan lowered interest rates when stocks fell but didn't raise them in a boom, potentially keeping rates low. The ECB focused on the exchange rate to the dollar until 2006. While the Fed showed asymmetric policy towards stocks, the ECB indirectly followed the Fed's lead through the exchange rate.