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Yellen's testimony: taper will be continued

The new Federal Reserve Chair Janet Yellen is her testimony to Congress said the labor market recovery is "far from complete" despite a drop in unemployment, yet she said the U.S. central bank expects to continue trimming policy stimulus in measured steps due to broader improvements in the economy.

More points to pay attention to:

  • Yellen emphasized continuity in the Fed's approach to policy, saying she strongly supports the approach driven by her predecessor, Ben Bernanke.
  • Some of recent softness in CPI likely reflects transitory factors, oil, non-oil imports;
  • She believes the recent global financial volatility does not pose substantial risks to US economic outlook;
  • Yellen predicts moderate growth in economy and jobs in 2014/15.

Nothing unexpected was announced. EUR/USD weakened by 30 pips to $1.3650 post the testimony. 

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