In trying to reach a solution, it is important to recognize what the markets are signaling, even though, admittedly the basis of some of these market engendered fears may not be objective. Let me illustrate with a metaphor from physics. It is well known that Einstein could not reconcile to the probabilistic nature of quantum mechanics all through his life.
He famously said: “God does not play dice.” Less well known perhaps is the retort of his friend and mentor Niels Bohr who said: “Albert, stop telling God what he can or cannot do.” Similarly, it is possibly the case that all market signals are not objective. But as policy makers, we cannot presume to tell the market how to behave.