After a decade of zero rates and QE post-2008, the financial system can no longer function without continuous stimulus. Attempts to tighten policy, as seen with the 2018 repo crisis, immediately cause breakdowns, forcing central banks to reverse course and indicating a permanent state of intervention.

A generation of investors has only known a market where the Federal Reserve intervenes to prevent crises. This creates a deep-seated belief in a 'Fed put' that won't dissipate until the Fed is forced to let a significant event unfold without a bailout, which is unlikely in the near term.

When the prevailing narrative, supported by Fed actions, is that the economy will 'run hot,' it becomes a self-fulfilling prophecy. Consumers and institutions alter their behavior by borrowing more and buying hard assets, which in turn fuels actual inflation.

Despite conflicting inflation data, the Federal Reserve feels compelled to cut interest rates. With markets pricing in a 96% probability of a cut, failing to do so would trigger a significant stock market shock. This makes managing market expectations a primary driver of the policy decision, potentially overriding pure economic rationale.

Acknowledging that the Federal Reserve and government policy consistently bail out markets and inflate asset values creates a clear, if cynical, investment thesis. Rather than fighting the system, investors should align with it by owning assets, as the "house" is set up to benefit them.

In today's hyper-financialized economy, central banks no longer need to actually buy assets to stop a crisis. The mere announcement of their willingness to act, like the Fed's 2020 corporate bond facility, is enough to restore market confidence as traders front-run the intervention.

Current rate cuts, intended as risk management, are not a one-way street. By stimulating the economy, they raise the probability that the Fed will need to reverse course and hike rates later to manage potential outperformance, creating a "two-sided" risk distribution for investors.

The U.S. is experiencing a rare combination of easing monetary, fiscal, and regulatory policies at the same time. This trifecta of support, typically reserved for dire economic conditions, is creating a favorable environment where markets can run hot and valuations may overshoot their typical levels.

A whole generation of market participants has never experienced a true, prolonged downturn, having been conditioned to always 'buy the dip' in a central bank-supported environment. This lack of crisis experience could exacerbate the next real recession, as ingrained behaviors prove ineffective or harmful.