Janet Yellen gave her first congressional testimony as the first-ever female Chair of the Federal Reserve on Tuesday, and the major theme on her new tenure was clear: steady as she goes. Speaking before the House Financial Services Committee, Yellen held fast to the Federal Reserve’s positive outlook on the economy and signaled the continuation of the Fed’s taper of bond buying.
On the United States' economic prospects headed into the next few years, Yellen appeared to be optimistic. In her prepared testimony (of which Felix Salmon has a helpful annotation here), Yellen wrote that she anticipates that "economic activity and employment will expand at a moderate pace this year and next" and that "the unemployment rate will continue to decline." The big takeaway, then, is that based on the trends in data available, Yellen expects continual improvement for the U.S. economy. Nothing Earth-shattering.
She cited the uptick in economic activity at the end of last year, highlighting growth in U.S. economic output (3.5 percent growth in GDP the second half of 2013), and the 1.25 million jobs added since July in her argument that the “economic recovery gained greater traction in the second half of last year.” Despite that optimism, however, Yellen noted that the unemployment rate remains higher than what the Fed considers to be full employment, which means that the recovery is not yet complete.