Janet Yellen's confirmation hearing on Thursday will be closely followed by markets that have become highly dependent on exceptional central bank support. Having said that — and political theatrics apart — we should expect few dramatic headlines and market-moving pronouncements. Instead, Ms. Yellen's testimony will likely affirm five points; they are well worth remembering when markets fret again about the Federal Reserve as they will inevitably do so in the next few months.
1. Janet Yellen is highly qualified to take over Ben Bernanke's job.
Thursday's hearing will quickly establish Ms. Yellen's outstanding credentials as an economist and a policy maker. Look for the discussion to highlight in particular her solid academic foundation, extensive policy experience, and sound judgment over many years — all of which speak to a smooth and credible leadership transition at a particularly tricky time for the Federal Reserve.