Cheap money’s distortions remain, not least in life insurance

ARE we back to “normal”? That is a question many investors might now ask, after the US Federal Reserve cut interest rates by a whopping 50 basis points this week.

After all, ever since the 2008 crisis, finance has been in a deeply abnormal state. First, central banks slashed rates to stave off depression, then they doubled down when the pandemic hit – before finally raising in panic when inflation exploded.

Now the Fed is cutting rates in response to slower growth. This looks more like the pre-2008 financial cycles. No wonder markets are rallying in relief.