Stock markets around the world have been rallying over the past few weeks, driven in part by the unprecedented actions of the world’s largest central banks. In the United States, the S&P 500 is now back to where it was at the beginning of the year. The rally, combined with the easing of lockdown measures currently taking place around the world, is creating a great deal of optimism among market watchers. Unfortunately, the picture is not quite as rosy as it seems.

The stock market rally has been driven primarily by the actions of central banks — and particularly those of the Federal Reserve. The Fed has promised to implement “QE infinity” — in other words, it will not stop purchasing assets (using newly created central bank money) until it is satisfied that the risk to financial markets has passed.

Then there is the alphabet soup of new asset purchasing and liquidity programs that are supporting other markets. Through the Commercial Paper Funding Facility (CPFF), the Primary Market Corporate Credit Facility (PMCCF), and the Secondary Market Corporate Credit Facility (SMCCF), the Fed is now buying the debt of private corporations — paying little attention to their creditworthiness, and absolutely no attention to their environmental impact or record on workers’ rights. Meanwhile, the government is backstopping the market for auto loans, student loans, and municipal bonds through programs like Term Asset-Backed Securities Loan Facility (TALF; first used after the 2008 financial crisis), the Primary Dealer Credit Facility (PDCF), and the medium-term lending facility (MLF).