Guy Stephens: Spare the policy rod and spoil the market

The latest testimony from Janet Yellen showed that, yet again, the Federal Reserve has blinked amid concerns the US economy may be entering a soft patch, based on a very recent set of numbers. Long gone are the days when central bank policy was consistently applied using a set of economic principles based on long-term economic goals. As we have said before, equity markets are supported by the knowledge the guarantor of last resort remains firmly in place with its printing press if need be and will provide liquidity and maintain excessively low interest rates for as long as it can. If ...