Storms brew as Yellen takes charge of Fed

Reuters - Janet Yellen was all smiles at her swearing in ceremony. She is now the first female to chair the Federal Reserve. And inherits a pile of work and big decisions.

The Fed is in the middle of unwinding its unprecedented bond buying program- taking it down by $10 billion for the second time last week.

And she is closely watching the unemployment rate- now at 6.7 percent- very close to the Fed's target of 6.5%. A topic sure to come up at her first big testimony to Congress next week:

BMO Capital Markets Chief U.S. economist Michael Gregory:

SOUNDBITE: MICHAEL GREGORY, CHIEF U.S. ECONOMIST, BMO CAPITAL MARKETS (ENGLISH) SAYING:

"I think she will obviously talk about the unemployment rate between the two aspects of the mandate: the inflation underperformance and too high unemployment. Ms Yellen has always put a bit more emphasis on the labor market side. But that unemployment rate has fallen quite a bit over the last little while and I think what she will probably do is portray that she has a very balanced approach. She is looking both at inflation and at the unemployment rate and that maybe her dove-ish reputation may be lowered just a little bit."

She is also likely watching the U.S. stock market- it's been taking a beating on weaker economic data in the U.S. and serious concerns about how extreme measures taken by the central banks of emerging markets are impacting the U.S. financial markets. While the Fed has said its remaining focused on matters here- that could change.

Mesirow Financial Chief Economist Diane Swonk:

SOUNDBITE: DIANE SWONK, CHIEF ECONOMIST, MESIROW FINANCIAL (ENGLISH) SAYING:

"If however things in emerging markets result in some sort of panic that goes beyond what we see in the fundamentals alone which are not terrific for those emerging markets and spill over into the U.S. economy or the global financial economy more dramatically than we've seen, or more disorderly, she will have no choice but to have to deal with them more directly."

Yellen's predecessor, Ben Bernanke has joined U.S policy think tank the Brookings Institution.