If taken at face value, Federal Reserve chair Jay Powell’s justification for the unusually aggressive start to the central bank’s rate-cutting cycle reinforces the market belief that we never exited, nor are likely to any time soon, the monetary policy regime that first flourished in the run-up to the 2008 global financial crisis.

That regime of ample liquidity provided by the central bank to markets now serves as an insurance policy against an ever-broader range of risks.

It is relatively unusual for the Fed to initiate a cutting cycle with a 0.5 percentage point cut. It is even more unusual for this to happen when, according to Powell, the economy is “in a good place”, the Fed has “growing confidence that the strength in the labour market can be maintained” and fiscal policy has been so consistently loose.