The U.S. stock market is becoming ‘too big to fail’

The U.S. stock market has grown to represent a larger share of total U.S. wealth than at any point in recent history, according to Federal Reserve data. This concentration means that significant declines in equity values would create broader economic disruption affecting pension funds, retirement accounts, and consumer spending. Central banks have responded to major market downturns since 2008 with intervention measures including interest rate cuts and asset purchases. The practical effect is that policymakers face stronger incentives to prevent steep, prolonged market declines through policy action.

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