What a Yellen-Led Fed Will Look Like

Here are 5 things to expect if Yellen becomes the first chairwoman of the Federal Reserve.

Janet Yellen listens during a macro policy discussion during the International Monetary Fund and World Bank Group Spring Meetings on April 16, 2013, in Washington, D.C.
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4. Prescience: By the numbers, Yellen has been remarkably right on the money when it comes to predicting the future. A Wall Street Journal analysis in June found that Yellen was the most accurate forecaster among 14 Fed policymakers between 2009 and 2012.

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In addition, Yellen is known for having spotted signs of collapse in the housing market far before most of her peers did.

"In terms of risks to the outlook for growth, I still feel the presence of a 600-pound gorilla in the room, and that is the housing sector," she said at a Fed meeting in June 2007. Though her colleagues also saw weakness in housing, they did not express similar concerns. Sure enough, the housing bubble soon burst, creating a prolonged economic downturn.

5. Uncertainty: That is not an insult to Yellen; anyone taking on the role of Fed chairman next would take on the daunting task of unwinding three rounds of quantitative easing. Those massive asset purchases have helped balloon the assets on the Fed's balance sheet from around $900 million at the end of 2008 to around $3.7 trillion today. Bringing that back down will be an unprecedented task, and all eyes in global markets will be on the Fed to see if it can return that total to normal levels without threatening a fragile economic recovery.


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