An article from Bloomberg today … She’s No Greenspan: Yellen Signals She Won’t Babysit Markets in Turmoil

It looks at how Janet Yellen has signaled she wants to place the economic outlook at the center of policy making, while looking past short-term market fluctuations

To do so she must “wean investors from the notion”that the Fed will bail them out if their bets go bad — just as a put option protects against a drop in stock prices … i.e the “Fed put’.

Says Bloomberg:

When Fed officials met in October, two weeks after the Standard and Poor’s 500 Index (SPX) wiped out all of its gains for the year, they discussed adding a reference to market turmoil in their statement. They rejected the idea to avoid the “misimpression that monetary policy was likely to respond to increases in volatility,” according to minutes of the meeting.

“Let me be clear, there is no Fed equity market put,” William C. Dudley, president of the New York Fed, the central bank’s watchdog on financial markets, said in a Dec. 1 speech in New York. “Because financial-market conditions affect economic activity only slowly over time, this suggests that we should look through short-term volatility.”

Probably a good thing that this is getting a run in the press. If only Thomas Jordan from the SNB had started expressing doubt about the SNB’s floor/ceiling for the EUR/CHF instead of abruptly pulling it and then yelling it from the rooftops maybe the carnage on Thursday would have been less. Maybe.