Janet Yellen was sworn in yesterday as the fifteenth chair and first woman to head the Federal Reserve. She replaced Ben Bernanke, who presided over his final session during last week’s meeting of the Federal Open Market Committee (FOMC). The Fed announced after that meeting that it would once again taper its monthly asset purchases. Yellen’s installation and the continuation of tapering indicate that Bernanke’s retirement is not the end of an era or an unprecedented turn, but rather business as usual at the central bank.
At the Fed’s January 28-29 meeting, the FOMC announced that it will reduce the scale of quantitative easing. The reduction in asset purchases is $10 billion, bringing the monthly total down from $75 billion to $65 billion. The last reduction was announced during the Fed’s December meeting in 2013, and markets reacted positively. This announcement, however, came on the heels of a bad week for equity markets.