market power, or credit risk. Variation in credit risk does materially affect monetary policy transmission to corporate bonds …

, and inertia. Asset pricing is determined by a different group of forward-looking agents ("the market"). The central bank … asset price fluctuations driven by financial market shocks ("the Fed put/call"), but destabilizes asset prices in response …). Although the Fed targets asset prices, it "cooperates" with the market to achieve its desired asset price. When the market and …

volatility but heightens asset market volatility; (vii) disagreements between the market and the Fed microfound monetary policy …