Yellen Looks to Not Repeat Bernanke's Blunder

NEW YORK (TheStreet) -- Federal Reserve Chair Janet Yellen will try not to disrupt markets during her testimony today, learning from her past mistakes, as well as from those made by her predecessor, Ben Bernanke.

Yellen was scheduled to speak in front of the Joint Economic Committee this morning, with traders hanging on her every word to determine when the Fed will raise benchmark rates.

Yellen's job is to keep the faith in markets by continuing her stance that the economy is improving and that the central bank's stimulus program will continue to be unwound.

If she deviates too far, as she did in March when she suggested rates could rise as soon as six months after tapering ends, stocks could crash lower as the market will be caught off guard.

Although the headline labor market figure looked great last Friday as 288,000 jobs were added in April, many economists see holes in the economy. For example, the labor force declined by 806,000 workers in April, the fourth-largest decline since the Department of Labor began recording the statistic in 1948.

A mixed labor market -- alongside lackluster economic growth -- means that Yellen probably shouldn't be too bold this time around and suggest that rates will rise any sooner than the summer of next year.

If she needs a reminder of the effects a bold prediction can have, she can look at her comments in March and also back to last May when Bernanke hinted that the Fed was considering reducing its stimulus program over the next few meetings.

If you liked this article you might like

3 Tech Setups That Look Tantalizing

4 Nice Setups for a Monday Morning

Moved to a Large Bond Short; Kroger Goes on Sale: Best of Kass

How Have Bond Funds Done This Year?

Doubt Is OK; The Lay of the Land: Doug Kass' Views