Bernankesque performance

Yellen channels her inner Bernanke before Congress

Janet Yellen channelled her inner Ben Bernanke before Congress in her first confirmation hearing to lead the Federal Reserve. She was calm and composed, despite some tough questions from Republicans and Democrats, ranging from monetary policy to regulation. On quantitative easing queries, she argued the Fed's actions were prudent, without dropping any hints on the future. Markets might feel Bernanke never left.

Thursday's hearing on Capitol Hill is likely to have piqued Wall Street's interest more than most: the Senate Banking Committee members were grilling the probable next Fed chair. If Yellen continues to provide such uncontroversial, measured responses, though, her confirmation process should be fairly seamless. In fact, if you had closed your eyes and ignored her voice's timbre and Brooklyn accent, you might have thought it was just Bernanke testifying at another semiannual Fed hearing.

She stuck to the usual talking points on monetary policy. She reiterated the Fed leadership stance that bond buying, while aggressive, had improved unemployment. She said current measures would continue until central bankers were sure labor market progress was meaningful and sustainable - without providing any indication on timing or precisely what the Fed's committee was looking for to begin tapering down the stimulus.

She also swatted away concerns that the Fed's aggressive bond buying was creating asset bubbles or that rising interest rates could throw banks into chaos. She expressed Bernanke-like confidence that the central bank's stress tests proved that when rates rise, financial institutions will manage.

Also Bernankesque was her response to Senator Elizabeth Warren, who questioned the Fed's dedication to tough bank oversight. She admitted that the Fed made some mistakes before the crisis but said that its watchdog function was as important as setting monetary policy. Even on fiscal policy, a subject on which the central bank must tread lightly, she echoed her boss's usual line that Congress acts more as a part of the problem than the solution by cutting budgets. The S&P 500 Index was up nearly half a percentage point to a new record a few hours after the hearing on Thursday. Clearly, the market liked what it saw: a Bernanke in all but name.