Little Bounce Seen From Federal Reserve Stimulus

Weak economy means inflating home and stock prices does little


Federal Reserve stimulus has buoyed home and stock prices, but that won't generate as much an economic bounce as wealth gains once did, according to a recent study.

The financial crisis eroded the so-called wealth effect that Americans feel from rising property and stock values, producing a weaker spending boost, said Credit Suisse analysts Neal Soss and Henry Mo.

That makes the 7% yearly increase in the Case-Shiller home price index and the near-record high of the Dow Jones industrial average less encouraging.