Janet Yellen will signal continuity with her predecessor Ben Bernanke in her first public appearance as Federal Reserve chairwoman before the House of Representatives on Tuesday morning, saying that she expects the Fed to continue to taper its asset purchases in "measured steps" in the months ahead.
In prepared testimony for her appearance before the House Financial Services Committee, Yellen ruled out the possibility that recent weak jobs data could prompt the Fed to put the tapering process on hold after reducing the size of the Fed's monthly bond purchases from $85 billion to $65 billion over the past two monetary policy meetings.
Yellen will say that the cumulative progress in labor markets since the purchases began is enough to justify slowing the stimulus purchases, but the Fed's actions are dependent on incoming data continuing to show improvement.
In her testimony, Yellen will also play down the risk posed by turmoil in emerging markets to the U.S. economy. She will also project that inflation, after running at about 1 percent in 2013, will move back in line with the Fed's goal of 2 percent over the medium term.
As for the Fed's continued policy of near-zero short-term interest rates, Yellen provided no update to the Fed's guidance that they will remain near zero until "well past the time" that unemployment falls below 6.5 percent. The unemployment rate fell to 6.6 percent in January, raising questions about whether and how the Fed will add further detail to its plans for rates.
In short, Yellen is planning to signal no significant policy moves with her testimony today. It remains to be seen whether she will offer new details about Fed policy when congressmen question her.