As vice chairwoman of the Federal Reserve, Janet Yellen was an unabashed advocate of easy money who pressed colleagues to embrace her view.
As chairwoman she has taken a much different approach, becoming a restrained consensus seeker modeled after her predecessor, Ben Bernanke.
The switch has implications for how the Fed will navigate tough decisions in the months ahead. Many expected Ms. Yellen to steer the central bank toward extending its long period of superlow interest rates. But she has shown herself willing to move toward exiting from that policy as officials found the economy to be on stronger footing.
Ms. Yellen has spent much of this year winding down a bond-buying program meant to hold down long-term interest rates and planning for an eventual increase in the short-term rate the Fed controls, a “tapering” begun before her tenure started. With the bond program set to end next month, officials are turning to sensitive discussions about when to raise the short-term rate—and how to signal the move.
Her next test is this week. Meeting on Tuesday and Wednesday, Fed officials will discuss whether to shift their guidance on the short-term rate. They also are seeking to complete a new plan for managing the mechanics of future rate changes.