Below is a chart of the Discount Rate from 1928 to 1943. The point of this chart is to show that the restrictive rate policy from 1928 to 1929 saw the stock market and economy increase significantly. Meanwhile, the easy money policy period from 1929 to 1943 were the most devastating for the U.S. economy and stock market.
This is an ironic twist on the idea that if the Federal Reserve lowers interest rates then that should explain why the U.S. economy improved from 2009 to 2019. Interest rate policy and the Fed’s role is not the reason the economy turns around. This explains why Japan has not recovered from the 1990 bust as outlined in our article “The ‘Even Greater’ Depression of 1990 to 2019.”