Assessing whether or not asset prices are being driven by fundamentals is surrounded with so much uncertainty — perhaps sometimes uncertainty in the “Knightian” sense — that central banks should refrain from targeting asset prices.
Moreover, some hold the view that, while monetary policy actions can influence asset price developments, the magnitude of the swings in policy rates that would be needed to curb boom and bust cycles in asset prices at times of “irrational exuberance” could be so large as to have adverse implications for macroeconomic stability in the short term.