It's 'risk on' again, thanks to Yellen

JANET Yellen hasn't yet assumed the role of chairman of the US Federal Reserve but already she is wielding an influence on financial markets. Her comments during the week, widely interpreted as indicating that the Fed will continue pumping money into the system via its QE (quantitative easing) programme, have soothed worries that if the money printing stops, then stocks might actually have to rise or fall on fundamental or economic factors.

Now, thanks to reassurances from the incoming Fed chair that the taps will remain open, it's "risk on" again - at least on Wall Street. US indices rose to two all-time highs on Wednesday and Thursday - first because Ms Yellen's thoughts were released ahead of her testimony to the Senate Banking Committee and then again when she actually stood before the committee. In response, the Straits Times Index (STI) gained 24 points or 0.8 per cent over the week, w…