Abundant liquidity and risk aversion

Central banks (we look at the United States and the euro zone) have increased the money supply considerably and continue to do so. Two configurations are then possible : Abundant liquidity and high risk aversion: this would lead to a sharp fall in the risk-free long-term interest rate and a rise in risk premia (on equities, corporate bonds, real estate). This configuration was observed in 2009-2010, 2014-2016 and 2020; Abundant liquidity and low risk aversion: this would lead to a smaller fall in the risk-free long-term interest rate and a fall in risk premia. This configuration was observed in 2011-2013 and 2017-2019. For the time being, in the context of the COVID crisis, we are still in the first configuration. A return to the second configuration would lead to a sharp rise in risky asset prices .