The thing is, markets actually had more reason to place faith in Alan Greenspan 2000 than they do to have faith in Jerome Powell 2020, because Greenspan had a lot more ammunition. The short-term interest rates the Fed effectively controls were above 6 percent in late 2000, and the Fed ended up cutting rates by about 5 percentage points — which was, it turned out, still not enough to prevent a big stock slump and a recession.

Before today’s rate cut, the Fed only had around 1.5 percent, leaving far less room to cut. And the Fed’s counterparts abroad are in even worse shape: short-term interest rates in Europe are actually negative, so the European Central Bank has basically no room at all to cut further.

So why did markets get all giddy over the prospect of central bank stimulus? Bear in mind, also, that it was always a given that the Fed would cut rates if the coronavirus looked likely to do serious economic damage. So there wasn’t even much news on that front.

What probably happened, instead, was that talk of Fed easing provided a convenient peg on which to hang a story that was mostly about herd behavior.

My view of markets was shaped long ago by a classic analysis by Robert Shiller — who later won a richly deserved Nobel Prize — did of the huge October 1987 stock crash, which came out of the blue. After the fact, people tried to come up with various explanations of the crash, but Shiller managed to interview a large number of traders in real time, as the crash was happening. He found, basically, that traders were selling because other traders were selling; it was essentially a self-reinforcing selling panic.