Janet Yellen’s first appearance before Congress as our new chairman of the Federal Reserve this week inspired a 200-point rally in an otherwise slumping stock market.
She let everyone know that the Fed needn’t dash its quantitative easing programs if the economy starts to soften in its absence.
Since the 2008 financial crisis, the financial world has grown accustomed to the Fed printing tens of billions of dollars each month, and the stock market has been softening since the Fed began scaling back, or “tapering” this effort.
Yellen is convinced that mere words from the Fed are often all it takes – and this week she was right. The rally her talk she inspired was against the backdrop of a long and painful January for stocks.
Click here to read my column on MarketWatch.
