If the Fed is buying bonds and primary dealers receive the cash, those dealers are institutional investors (banks, asset managers) with mandates that don't include buying equities like Nvidia; thus they use the cash to buy other fixed-income assets, creating a flow within fixed income but not from fixed income to equities.

Initial conditions (balance sheet health, employment, consumer savings) matter far more than monetary policy for determining whether a rate increase causes a recession; because households and corporations had strong balance sheets and fiscal support had bolstered savings going into 2022, the Fed's 500bp rate increase did not cause a recession despite hitting the tightest financial conditions in years.

The pandemic created a massive sectoral reallocation: incomes were maintained through fiscal support but people couldn't consume services, so everything went into goods, creating inventory backlogs that took years to clear; the statistical system overweighted these goods indicators because it's geared to the old manufacturing-heavy economy, causing people to overestimate recession probability.

Stock valuation multiples are currently high relative to history, and this is explained by strong growth expectations (particularly in AI and mega-cap tech) and continued resilience in earnings growth, not by Fed stimulus or low discount rates.