And just like they did for her predecessors, the markets hung on every single word.
Except in this case, nobody (and I mean nobody) expected any major fireworks. What they were looking for instead was a confirmation that it would be "business as usual."
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What the Fed Taper Means for Markets and Your Money
I didn't think it would happen, but Fed Chairman Ben Bernanke up and did "it" a few minutes ago.
He announced the "Fed taper" - the Fed will cut its bond buying by $10 billion a month (to $75 billion) beginning in January.
I think there are a few points to consider about Bernanke's move. I want talk briefly about those, and then highlight what this news of a Fed taper means for your money.
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Janet Yellen's Testimony Didn't Intend to Reveal This Profit Opportunity
Janet Yellen's debut performance yesterday before the Senate Committee on Banking, Housing, and Urban Development may have inadvertently pointed investors toward the best profit opportunities in the continuing financial asset bubble.
The key is a single phrase, one with two meanings that signals where the real money will be made before the bubble goes "pop."
Here's what Janet Yellen said...
Deflation Is Coming (and It's Not What You Think)
Be careful out there.
The stock market rally that started in March 2009... The one that's taken us out of the Great Recession and to new highs... The rally that's driving sentiment indicators of people who benefit from rising financial assets directly, peripherally, or because they hope all boats rise with the market...
The rally has never been loved.
The thing is, equity markets don't need love to go twice as high from here, or three times as high in the next 20 years. If they get what else they need, they'll keep going higher.
We could be on the verge of a generational bull market. That's if deficit-plagued, interconnected global sovereigns deleverage and, at the same time, re-capitalize middle and rising classes by making "recourse-sound" capital available and simultaneously reconstituting entirely the notion of taxation.
Too bad the likelihood of that happening is somewhere between slim and none.
That's one reason why I'm an increasingly reluctant bull.
But there's another reason too.
And it has to do with deflation...
How the Fed QE Taper Will Affect Foreign Markets
Hints from the U.S. Federal Reserve this week that the quantitative easing (QE) taper is near pushed the Dow down 105 points Wednesday - but the idea of less Fed stimulus has caused much more turmoil in certain overseas markets.
The problem: A corresponding hike in U.S. debt yields has fueled higher borrowing costs around the globe. This has led to the flight of cheap capital out of emerging currencies and markets.
That triggered the following reactions:
Brace Yourself: This Is What the Fed’s QE Has Done for Our Economy
The Fed's QE (quantitative easing) program has created multiple trillions of dollars since it first started in 2008.
But now there are signs the QE policy will finally come to a close.
FOMC Meeting: Look to Statement for QE Clues
Don't expect a definitive answer from this week's Federal Open Market Committee (FOMC) meeting on when the Fed will begin tapering its massive quantitative easing program.
Instead, the focus will be on the FOMC's statement, which will be scoured for clues about when scaling back QE3 could begin.
"We do not expect any modifications to the asset purchase pace or forward guidance at this meeting, so markets are likely to hang on every word change in the statement," Michael Hanson, an economist at Bank of America Merrill Lynch Global Research, said in a research report.
This month's FOMC meeting is the last before September, the month the markets have been expecting the Fed to announce "the taper."
Brian Gardner, senior vice president of Washington Research at Keefe, Bruyette & Woods, said the economic outlook will be key to finding taper clues.
"We do not expect any changes in policy (either for large-scale asset purchases or for Fed funds rates) but the commentary on the state of the economy could be significant," Gardner said in a research note. "As Fed officials have recently reinforced their intent to look at the outlook for the labor market and the economy, any change in the Fed's description of the economy could provide a better idea of when the Fed might taper asset purchases."
But, Gardner added, "Our guess is that any change in language will be nuanced and keep the markets guessing about when the Fed will taper."
He said Friday's jobs report may ultimately be as significant as the FOMC statement in terms of gauging when tapering would take place.
Esther George on Why It's Time to Begin Adjusting QE
Kansas City Fed President Esther George hasn't changed her tune about the Fed's massive quantitative easing (QE) program, as she explained in an exclusive interview with FOX Business Network today (Tuesday).
"I think it is time to begin to adjust those purchases," she told FBN's Peter Barnes. "The labor market has shown now, for the last six months, pretty steady gains of close to 200,000 per month. That is a good indicator that there has been sustained improvement here and that I think it would be appropriate, given the size of our balance sheet, given the level of accommodation, that we begin to make adjustments that reflect that improvement as we go forward."
Launched last year, and dubbed QE Forever, the program is aimed at holding down long-term interest rates. It has fueled the recent housing rebound and record breaking stock-market rallies.
Your Best Strategy for Playing This QE Rally
Don't worry. The bubble "Quantitative Easing" has built is still intact. For now.
However, even though there's breathing room, don't think it's time to breathe easy. There will be Hell to pay, just not now.
And I have found three opportunities to take advantage of the next phase in this unsettling market.
But let's gather some perspective first.
The news that the Fed might taper QE bond purchases gave the bond (and stock) markets a fit of the vapors and caused gold to careen toward $1,200 an ounce.