As Yellen Faces Senators, Here's What To Watch For
Under Bernanke, the Fed has engaged in three rounds of bond buying to support the economy. Its investment portfolio has swollen to a record $3.85 trillion a¿¿ a four-fold increase since the financial crisis struck in 2008.
Critics, including Republican lawmakers, argue that all the money the Fed has pumped into the economy is creating bubbles in stocks and perhaps other assets. Eventually, an asset bubble can pop with the same devastating effects that the collapse of the housing bubble produced.
Some also worry that the Fed's bond buying is ensuring future high inflation. And they say markets will be vulnerable to turbulent swings once the Fed starts selling its portfolio.
Investors will be listening for any comments from Yellen about the Fed's exit plans and whether she's considering safeguards to protect the markets and the economy from turbulence.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts