Talk about rapid response mode. Politicians, spurred on by the coming general election, spewed out a $150bn stimulus plan in record time. The Federal Reserve, after Wednesday’s half point cut, has loosened monetary policy by a stonking 2.25 percentage points in four months. Have they moved too fast?

No. Yesterday’s action was backed up by anaemic US economic growth in the fourth quarter – sapped by weak consumer spending and companies reducing inventories in anticipation of a slowdown. The housing market remains horrible. Prices are still falling and a big overhang of unsold homes suggests further pain. Reduced residential investment shaved 1.2 percentage points off US growth.