For years, the financial and political worlds turned on the public pronouncements of Federal Reserve Chairman Ben Bernanke. Starting today, Janet Yellen takes his place as the voice of reason and/or panic.
Yes, Bernanke is still on the job for a few more months, but it's Yellen's words that matter the most now. When she goes before the Senate Banking Committee for her confirmation hearing on Thursday, every answer Yellen gives will be dissected and analyzed in the hope of unlocking the code that will reveal the Fed's mind once she actually takes over. It will be the first of many, many chances for Janet Yellen to "move the market" with nothing more than a casual remark.
Actually, she already started down that path last night, when she released her prepared remarks to the media ahead of the hearing. The U.S. dollar dropped against several major currencies after folks got a chance to read it, as her policies are seen by many as risky for future inflation. Most observers interpreted her statement as "dovish" — meaning she's in favor of low interest rates, and unworried by potential inflation. But Joe Weisenthal at Business Insider says it wasn't even that she said anything particularly dovish in her speech... she just didn't anything "hawkish." Because when you're the fed chair, sometimes not saying something is just as important as actually saying it.