Commercial banks actually create the money (by issuing loans) that is used to buy houses (mortgages) and stocks (leverage). Central banks affect this process b

Commercial banks actually create the money (by issuing loans) that is used to buy houses (mortgages) and stocks (leverage). Central banks affect this process by adjusting the rate to which they lend to the commercial banks, and by quantitative easing /tightening which has a similar effect on long term rates. Rates are low, more loan value is issued (because the income stream servicing the loan translates into a larger loan amount), asset prices go up. And conversely.