Yellen: Expect continuity at the Fed

WASHINGTON — Federal Reserve Chair Janet Yellen sought Tuesday to reassure investors that she will embrace the approach to interest-rate policy that her predecessor, Ben Bernanke, pursued before he stepped down as chairman last month.

Yellen told Congress that if the economy keeps improving, the Fed will take “further measured steps” to reduce the support it’s providing through bond purchases.

In her first public comments since taking over the top Fed job last week, Yellen said she expects a “great deal of continuity” with Bernanke. She signaled that she supports his view that the economy is strengthening enough to withstand a pullback in stimulus but that rates should stay low to further improve a still-lackluster economy.

Her message of continuity at the Fed was a reassuring one for investors, and it contributed to a rally on Wall Street. The Dow Jones industrial average jumped 190 points in early-afternoon trading.

Yellen’s remarks to a House committee suggested that the Fed will keep its key short-term rate near zero for a prolonged period.

“The recovery in the labor market is far from complete,” Yellen said, an indication that the Fed is in no hurry to boost short-term rates.