While, in a normal Economy, the market and the economy might be used as a gauge for each other, in our present situation, what seems good for one does not necessarily translate into something equally good for the other.

Case in point: The U.S. economy is driven by consumption (70% of GDP) and not stock market equity prices.

“We’ve made rich people richer,” Dallas Fed President Richard Fisher remarked to CNBC.

“This is great for the (Warren) Buffetts and for others who can take advantage of this multiple of great money and cheap money that’s been available,” he observed. “The question is, what have we done for the working men and women of America?”

Mr. Fisher is something less than a fan of the Fed policy to date. “Government is not the future, the private sector is the future,” he stated. “Right now, (companies are) using cheap money to buy back their stock, pay extra dividends, etc. etc. We all know what is going on.”

Analysis from Goldman Sachs reveals that maintaining rates at extremely low levels has “large and significant effects on equity prices.”

Goldman’s analysis observed that market behavior in answer to a quarter-point cut in rates generally lead to a 1 percent rise in stock prices. The biggest advantage was found in financials and rate-sensitive consumer stocks, while energy, staples and health care showed the least response over time.

“Taken together with our dovish view of the Fed … this reinforces our generally upbeat view of the equity market, particularly our top-trade recommendation to be long in large-cap U.S. banks,” noted economists Sven Jari Stehn and Noah Weisberger.

The expectations for a rosy economy, on the other hand, are less than rosy. Fisher affirmed those prospects are not expected to change in the positive until sensible fiscal policy replaces the current wild monetary policy.

“What I’m focused on is the movement toward putting people back to work and the efficacy in monetary policy in getting that done,” commented Fisher, maintaining that today’s situation will remain until “uncertainty” regarding fiscal policy is dealt with. “Until then we’re just underwriting these guys for not getting their job done.”

So while the market steams ahead, the elephant in the middle of the room remains the economy.