The members of the Senate Banking Committee were well-behaved as they questioned Federal Reserve Vice Chairman Janet Yellen, who, if confirmed, would be the first woman to run the Fed in its 100 year history. As for hot, market-moving headlines, Yellen's comments would seem to reduce the odds of a December, or any near-term, tapering. "Purchases have made a meaningful contribution to economic growth," Yellen said in the Q&A following her short opening statement, released yesterday. They "cannot continue forever."
While policy makers evaluate the costs and benefits of the asset-purchase program at every meeting, "It's important not to remove support, especially when the recovery is fragile and the tools available to monetary policy, should the economy falter, are limited given that short-term interest rates are at zero," she said.