By MARTIN CRUTSINGER
WASHINGTON (AP) a¿¿ Janet Yellen is sure to face skepticism at a hearing Thursday on her nomination to lead the Federal Reserve from Republicans who say the Fed's policies may be swelling asset bubbles or raising the risk of high inflation.
The one thing investors will most want to know is the one thing Yellen isn't likely to say: When she expects the Fed to scale back its stimulus for the economy.
As chairman, Yellen would likely extend the low-interest-rate policies pushed by the departing Ben Bernanke. As vice chairman, she's been a key architect of those policies.She's expected to stress Thursday that the Fed under her leadership would honor its dual mandate: To maximize job growth and keep prices stable. Yet at a time of still-high unemployment (7.3 percent) and low inflation (sub-2 percent), a Yellen-led Fed would likely favor Bernanke's approach of keeping rates low until the job market and economy improve consistently. Even with some Republican resistance, Yellen's backing by the Senate Banking Committee and confirmation by the full Senate is viewed as all but assured. But approval won't come before critics air their grievances about the Fed's response to the financial crisis and the Great Recession. In testimony prepared for the hearing, Yellen says the economy has regained ground lost to the recession. But she says unemployment remains too high and notes that the Fed is still trying to accelerate the economy's recovery. "For these reasons, the Federal Reserve is using its monetary policy tools to promote a more robust recovery," Yellen says in her testimony. "I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy." Here's what to listen for at Thursday's hearing: a¿¿ TAPER TIMING Investors will be alert for any hints of when a Yellen-led Fed might start reducing its $85 billion in monthly bond purchases a¿¿ a slowdown often called "tapering."