What is the primary function of the Yellen put in economic policy?

The primary function of the Yellen put in economic policy relates to the idea of providing a safety net for investors and the economy during uncertain economic times. By emphasizing the need to maintain a low probability of recession risks, this approach aims to support markets by suggesting that the central bank, under leadership like that of Janet Yellen, would act to counteract economic downturns. This can involve using tools such as interest rate adjustments or quantitative easing to help foster a stable economic environment conducive to growth.

This strategy reflects a proactive stance on economic intervention, where policymakers signal their readiness to support the economy and financial markets, thereby enhancing confidence among investors and participants in the economy. The focus on minimizing recession risks aligns with broader economic goals, including fostering employment, stability, and growth without the immediate concern of causing negative secondary effects like rampant inflation.