Janet Yellen lived up to her "continuity candidate" reputation during her extra-long public debut as Federal Reserve Board chair on Tuesday.
Yellen announced no major policy shifts in her testimony, which spanned six hours (including breaks), before the House Financial Services Committee. "Not a lot of new ground was broken, but that was to be expected," Richard Moody, chief economist at Regions Financial, emailed around hour five.
Yellen was, after all, the Fed's No. 2 policymaker beginning in 2010. She had espoused many of the same views as Chairman Ben Bernanke in that role. So when the announcement that Yellen was President Obama's pick to succeed Bernanke was made on Oct. 9, economists expected her to approach the job with the same general philosophy as her predecessor.
"Beyond speaking style, there was little differentiation," Brett Ryan, vice president for U.S. economic research at Deutsche Bank, said in an email during her testimony. Even with that speaking style, marked by Yellen's Brooklyn accent, she deployed a number of Bernanke-isms, noting for example, that monetary policy "is not a panacea" for the economy's woes and that the dual mandate "has served us well," favorite expressions of the Fed chief who departed on Jan. 31.
And like Bernanke, Yellen argued that proposed legislation to open up the Fed's monetary policy decision to audits from the Government Accountability Office would do more harm than good. Like Bernanke, she stressed that the Fed's unwinding of its bond-buying program, which began in December, is not on a pre-set course.
"I think that Janet Yellen is well on her way toward accomplishing her goal of navigating a smooth transition at the Fed," Robert Dye, chief economist at Comerica Bank, emailed.
Deutsche Bank's Ryan saw a subtle distinction in how Yellen described the Federal Reserve's looming decision about raising its benchmark interest rate, which has been near zero since December 2008. The Fed has said it would keep the rate low at least as long as unemployment is above 6.5 percent and the outlook for inflation is no higher than 2.5 percent over the coming year or two. With the jobless rate at 6.6 percent as of last Friday's employment report, economists were looking for clarity on how the central bank would make the call to raise rates.
"Crossing one of these thresholds will not automatically prompt an increase in the federal funds rate, but will instead indicate only that it had become appropriate for the committee to consider whether the broader economic outlook would justify such an increase," Yellen said in her prepared testimony.
In addition to being notable for its length, Yellen's testimony bore plenty of the hallmarks of a first day on the job. House Financial Services Committee Chairman Jeb Hensarling, R-Texas, had to ask Yellen to adjust her microphone a handful of times. Some committee members pointed out to the Fed chief where they were sitting, to help her know where to look while answering their questions. A man approached Yellen for an autograph during a break from the hearing. Another woman asked to have her photo taken with the new Fed chair, who is the first woman to lead the central bank in its 100-year history.
Some of those first-day hallmarks extended beyond navigating Room 2128 of the Rayburn House Office Building or being approached by strangers. When asked about the Financial Stability Oversight Council, a group of regulators convened by the Dodd-Frank Act to discuss risks to the country's financial stability, Yellen noted that she had yet to attend a meeting.
It will take time before any real distinctions between Yellen and her predecessor emerge. For now, Rep. Ed Perlmutter, D-Colo., paid Yellen a compliment after three hours of testimony that can only be seen as positive in the Fed chair's world of trying not to rattle markets every time they speak. "[Bernanke] was very smart, very steady, and not very exciting, and I want to say you're following in his footsteps," Perlmutter said.