Komal Sri-Kumar Bloomberg The past week was remarkable in many ways. The Fed declared that the economy was on an improving track just a couple of days before GDP data released on Friday showed that the US posted the weakest recovery since the Second World War.

The Bank of Japan, widely expected to ease further, instead kept its negative rate and monthly bond purchases unchanged. The yen surged as a result. Just as important, the BoJ made no move toward helicopter money despite a recent visit to Tokyo by former Fed Chairman Bernanke, a big proponent of the strategy.

While the plunge in the Eurozone growth rate in the second quarter gave rise to forecasts of further easing by the ECB, the forecasts did not come with expectations that that would boost the region’s pace of growth.

Finally, extremely weak UK economy numbers led to the anticipation of a rate cut by the Bank of England on August 4 to 0.25% or even zero. This led major British banks to threaten to charge commercial depositors for holding their cash, effectively a negative deposit rate that could prompt additional flight of capital.

The developments are all the more remarkable in that there was no significant sign of a change in policy anywhere in the world toward less focus on monetary policy and greater emphasis on job creation, tax reforms or labor market flexibility. The second notable feature is that none of these factors appears to have affected the overall equity market. The S&P 500 index rose to new highs during July, ending the month up 3.5%. The surge in US equity prices was especially notable because forecasts of corporate earnings have been declining every quarter. And the 10-year Treasury whose yield rose to as high as 1.60% in early July, fell back 15bp by month’s end. Despite all the post-Brexit uncertainty, the FTSE-100 index rose by 3.3% last month.

In sum, global economic prospects deteriorated over the past few weeks even as global equities surged. What to make of the divergent moves?

Global investors are under no illusion that the collective action of the major central banks will eventually produce an economic turnaround. As monetary authorities keep adding liquidity even as more and more sovereign and corporate obligations yield negative returns, the lack of alternatives pushes investors into equities generally considered to be riskier than bonds. With no shining light among global economies — not in the United States, Europe or Japan, even as China slows markedly — investors pile into equities in the hope that the central banks will provide an unending stream of liquidity. Emerging market assets have risen sharply in recent weeks as yield-starved investors rush into their markets in search of yield. Just look at the sharp appreciation of the Brazilian real despite a severe recession and continuing allegations of corruption at the highest levels of government.

So far, there is no sign that the central banks are backing away from policies that have not worked in the years since the global financial crisis. In Japan, failed efforts to revive a stalled economy through monetary easing have now passed the quarter century mark. The BoJ’s balance sheet as a percentage of GDP has risen to over twice the US level over the past several years of bond buying. The Yellen Put, Carney Put, Draghi Put and Kuroda Put are very much alive as investors seek attractive returns. In the US, markets are sharply discounting the chances of a September rate hike, with the likelihood of a December increase being reduced as well. Keep the party going, the music is still on!

But how will the party end? Central bankers are not going to be the ones to burst the bubble through tighter monetary policies. As the bang to economies from each additional buck of liquidity diminishes further, investors will find that rising equity prices are no longer supportable even with rising liquidity. As valuations keep rising with slowing economies and falling corporate profits, the party will likely come to a sudden end - - much as equity prices crashed in 2000 – 2001, and equities and US house prices plunged in 2008. As in past crashes, don’t expect warning bells to ring to tell you to get out in time!