Wall Street Rides a $1 Trillion Money Wave as Fed Test Looms

In normal times, the price of money — the Federal Reserve’s benchmark interest rate — kept a close watch over Wall Street. A whisper of tighter policy chilled risk-taking; a hint of easier conditions sent markets surging.

Next week’s Fed meeting will test how far that classic logic still applies — in a cycle that keeps defying it.

Risk-taking this year hasn’t waited for Jerome Powell’s permission. Stocks sit at records, credit markets are booming, and exchange-traded funds have absorbed more than $800 billion this year, including $475 billion into equities, as mutual funds have bled cash. That puts ...