New chair means new rules. Despite Janet Yellen pledged to have a similar management style to Mr. Bernanke during her race to succeed him at the US Federal Reserve, everyone understood that changes are imminent. The bottom line is that Yellen, fresh from taking the helm of the Fed, makes it clear that she will fulfill her promises. During his two terms as chairman, Ben Bernanke used determinedly all the tools of the Fed to stabilize the U.S. economy and consequently the world economy. Janet Yellen, in her first speech as new Fed chair, said that she plans to stick to management practices and policies of her mentor Bernanke. She said more work is needed to restore the labor market. Yellen is known for her deep care about the unemployed and disadvantaged groups. “The unemployment rate has fallen nearly a percentage point since the middle of last year and 1-1.5 percentage points since the beginning of the current asset purchase program. Nevertheless, the recovery in the labor market is far from complete. The unemployment rate is still well above levels that Federal Open Market Committee (FOMC) participants estimate is consistent with maximum sustainable employment,” the new chairwoman said in her testimony before Congress. As for the main issue of concern to all market participants, major changes are unlikely in the quantitative easing program. Yellen said the Fed plans to scale back stimulus in “measured steps”.
