New Federal Reserve Chairman Janet Yellen got exactly what she wanted: a quiet, non-controversial hearing. Stocks rose modestly, interest rates were flat to down.
It wasn't that the questioning was irrelevant. All the right issues were addressed: asset bubbles, when tapering might begin ("this program cannot continue forever"), Dodd-Frank and bank regulation (it will make a "very meaningful difference"), and the Fed's communication outreach program ("we certainly want to diminish volatility").
It was just so...tame. No one raised their voice, no one tried to lead Yellen into some dark alleyway where she would have to admit that yes, Senator, you sure are right: our policies really did benefit the rich, and we haven't helped anybody else.
There was a brief moment of tension when Senator Corker tried to get her to admit that the Fed was in danger of becoming a prisoner of the market. But she parried with a bland response...we can't be prisoners of the market, we have to take into account market reactions...and instead of parrying back Senator Corker wound up his questioning by thanking her effusively:
"Dr. Yellen, I do want to tell you, I very much appreciate your candor and transparency. And I really do. I appreciate the conversation both in the office and I want to thank you for giving the same answers to questioners here today that you gave in the office. So thank you very much."
Really. That's exactly what he said.
I again thought things might get interesting when she said there were no signs of asset bubbles developing yet. You could almost hear the eyebrows raising in the room. I thought surely, somebody is going to raise their voice on this one.
Follow up questions were asked--including about the rise in home prices--but she parried them all in that monotonic voice. She said real estate prices had to be watched, but didn't think it was a bubble.
Again, I thought there might be some fireworks when she said there was only limited signs of a reach for yield...really? Assets under management at high yield funds have exploded in the last three years...anything that pays a dividend is in high demand...if that's not a reach for yield, I don't know what is. But no, she insisted there was no risk to financial stability, and no one challenged her.
What this tells me: despite a lot of sniping at the Fed, Janet Yellen has fairly broad support to continue bond buying until she is convinced there is a decisive turn in the market. The chances that the Fed will begin its tapering program in December is very low.
—By CNBC's Bob Pisani