The goals of the Federal Reserve are "maximum employment, stable prices, and moderate long-term interest rates." The real goal, though, is economic growth, and

The goals of the Federal Reserve are "maximum employment, stable prices, and moderate long-term interest rates." The real goal, though, is economic growth, and we just happen to believe that those intermediate goals are good at serving long-term economic growth. The prices of stocks are one of the most forward-looking macroeconomic measures that we have available to us. The better we get at improving long-term economic growth, the higher stock prices will go, other things being equal. So basically, if you have good policy, stock prices should always go up (in real terms). If the Federal Reserve were perfect at preventing recessions and everyone knew it, stock prices would be higher. While you would probably not want to make stock index growth the target of monetary policy because of Goodhart's Law, it is very reasonable to take it into account as a part of a forecast of how well your policy is working.