Even in the face of high interest rates due to inflation

Even in the face of high interest rates due to inflation
Most U.S. companies seem to be doing well
The stock price is also running toward an all-time high.

We believe that a price would be a good indication of the usefulness of the item
Is that really true?
Price is also a sign of utility
In reality, it's also the ratio of money to goods

If the price of an object is to rise, it is because it is highly effective, but the actual mechanism is that more money must be matched to the object
The process of matching more money is one of the two
1)The money that was matched to another item will be transferred to this item
2)The money of the whole society is increasing and more money is matched to the goods

However, number 2) is essential to increase the price of big items such as the S&P 500
In addition, in the case of stocks, not only should a sufficient amount of money be supplied in the stock trading market, but also the performance of the company represented by each stock should increase
In other words, money should be increased in the real economy as well

In the era of gold-based real currencies, rapid monetary growth was difficult, so the currency itself became an obstacle to economic growth
However, in this era of credit currency, it is relatively easy to increase currency due to economic growth

Since currency is increased through debt,
When the demand for money increases as the economy grows, the central bank lends more money to commercial banks, and again commercial banks lend more money to the private sector

When the central bank lends money, it doesn't count how much money the market has
Because you can't measure how much money you need on the market
Instead, it targets certain interest rates, adjusting the amount of loans so that those rates can be maintained
So how do we set that particular interest rate
As the Fed always says, it sets interest rates to ensure maximum employment and price stability
The greatest employment is, in other words, the greatest economic growth,
This means that the amount of money should be adjusted so that the highest capital allocation efficiency can be achieved

In order to increase the efficiency of capital allocation, the policy direction goes toward increasing the amount of money
This is because capital relocation will be active as many asset transactions and loans occur on the market when the amount of money is large
But if there is too much money, it will not only increase the lubrication of the financial market, but also touch the price of the real market

Given that the company's performance is good even in the current high-interest rate situation, there seems to be no shortage of money in the market despite the high-interest rate
Of course, not all business sectors can have enough money
Commercial real estate is directly hit by high interest rates, and when demand for commercial real estate shrinks rapidly, businesses in the business are struggling
But now the market-leading IT companies are running with record-high profits
The dramatic contrast in resource allocation among these business sectors is likely to intensify as financial markets develop
Still, the entire U.S. market is growing
In a sense, it is also an indication that capital arrangements in the current financial markets are working efficiently