Forget Ben Bernanke and Mario Draghi, writes Jefferies economist David Zervos in a note this morning.
Federal Reserve Vice Chair Janet Yellen just killed the most important black swan right now, proving the Fed will intercede if the recovery slows. Central banks to the rescue!
As we push back above 1380 (almost 1390 last night), the dip buying winnings are surely there, but the person yelling “black swan down” wasn’t Ben or Mario – it was little old Janet Yellen. The lady sure knows how to fire a bazooka!! Her comments the other evening suggested that the rate language may need to be extended thru 2015 and MBS QE3 was right there for the taking. Boom!! Squak!!! Thud!!! The sky is full of black feathers again – and a little white dove nailed a big black swan!!
He goes on to argue that European Central Bank President also has his finger on the easing trigger in case Spain comes under further fire.
COUNTERPOINT: EL-ERIAN: Here’s Why Central Banks Can’t Save The Economy >
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