One market bubble may be an accident; two in the space of a decade begins to look like carelessness. After the internet bubble that burst in 2000, and last year’s collapse of a credit and house price bubble, every sane central banker around the world must surely think again about whether to act against over-exuberant asset prices. That the US Federal Reserve is looking at this topic is welcome – but the correct conclusion is still far from clear.

The past couple of decades have seen a growing international consensus about monetary policy: central banks should be independent, their goal should be low but stable inflation, and they should use interest rates to achieve it. But as to what central banks should do about asset price bubbles – which damage economic growth and stability when they burst – controversy still rages.