Recent weak employment reports haven’t been enough to sway the Federal Reserve from reducing the pace of its monthly stimulus program, Chair Janet Yellen said Tuesday.
In her first public remarks, delivered to the House Financial Services Committee, Yellen said the central bank does not look at economic reports in a vacuum when determining its policy course.
“We have to very careful not to jump to conclusions interpreting what those reports mean,” she said. “There were weather factors. We’ve had unseasonably cold temperatures that may be affecting economic activity in this job market and elsewhere.
“The (Open Market) Committee will meet in March. We will have a broad range of data on the economy to look at, including an additional job report,” Yellen added. “I think it’s important for us to take our time to assess what the significance of this is.”
(Read more: Yellen sees better economy, less money printing)
The economy has been hit with consecutive weak nonfarm payrolls numbers, with just 75,000 new positions added in December and 113,000 in January. Both reports came after the Fed announced in December that it would begin paring back its then-$85 billion a month in purchases of Treasurys and mortgage-backed securities.
The Fed has reduced the purchases to $65 billion a month, and Yellen said a “notable change” in economic data would be required to halt further reductions. Wall Street expects the Fed to unwind the purchases completely by the end of 2014.
Traders seemed to like what they heard from Yellen, with the stock market adding to gains during her parley with the committee members.
Yellen said she believes the economy is in a sustainable economic recovery, though she noted she was “surprised” by the weak jobs data.
Yellen defended the central bank’s policy course, saying the central bank was trying to be as consistent as possible considering the difficulty of the task at hand.
Recent job market weakness, Yellen said, hasn’t been enough to sway the Fed from its course in reducing the pace of its monthly asset purchase program.
(Read more: ‘This isn’t your father’s Fed’: GOP congressman)
As the unemployment rate drifts toward the Fed-set threshold of 6.5 percent it had set in December 2012 for when it would consider raising interest rates, Open Market Committee officials have indicated that the target likely won’t hold.
In her first public comments since taking the Fed’s top position, Yellen told the House Financial Services Committee that the times have called for unusual policy moves.
“I have always been in favor of predictable monetary policy that responds in a systematic way to shifts in economic variables,” she said. Yellen called herself a “sensible central banker” but called the economic circumstances since the financial crisis “very unusual times.”
“We are attempting through our forward guidance to be a systematic and predictable as we can possibly be,” she said.
Yellen delivered her first public remarks to Congress on Tuesday, earlier pledging a steady course in which the central bank would continue unwinding its stimulus program so long as economic progress allowed.
Lawmakers tossed a variety of questions at Yellen, none particularly hostile though the central bank’s economic engineering has been the subject of considerable debate over the years since the financial crisis hit.
Questioned about high levels of minority jobless rates, Yellen said Congress needs to do its share of the heavy lifting to accelerate the recovery. The Fed is charged with a dual mandate: maximum employment and price stability.
“Monetary policy is not a panacea, and I think it’s absolutely appropriate for Congress to consider other measures you might take in order to foster the same goals,” she said.
In prepared remarks, Yellen tipped her hat to predecessor Ben Bernanke, whom she said “helped make our economy and financial system stronger.”
She also cited a “pickup in economic activity” but said more needs to be done before the Fed ends quantitative easing completely and begins raising interest rates.
—By CNBC’s Jeff Cox. Follow him on Twitter @JeffCoxCNBCcom.