Even if the US economy is not quite yet in a technical recession, it shows no sign of reviving. Unemployment is rising and other indicators underline the risk of a prolonged stagnation. Policymakers must be mindful of Japan’s experience. The danger that the US economy might settle into a similar pattern of slow self-destruction should be concentrating minds.

Viable policy options remain, though none is as straightforward as one would wish. Even with interest rates at 2 per cent, monetary policy can be loosened further if need be. The Federal Reserve is rightly keeping its eye on core inflation and is especially watchful for signs that expectations of faster-rising prices are starting to drive wages. For the moment, no such incipient wage-price spiral is apparent. Even with interest rates already negative in real terms, some freedom of manoeuvre remains, and is the first line of defence.