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Yellen pledges continuity; Rickards says prepare for a 'taper pause' in June

Janet Yellen, in her first testimony before lawmakers and the public as the new Fed chair, signaled continuity of monetary policy, yielding no surprises. Stocks rallied Tuesday with the Dow (^DJI) closing up 193 points.

Related: Investors look on the bright side: Are they wearing blinders?

But beyond continuity, what can we expect from the Fed, especially now that the jobless rate has dropped to 6.6%?

When asked by a Congressman about the more specific parameter's of the Fed's forward guidance -- which has interest rates remaining near zero as long as the unemployment rate is above 6.5% and inflation is in check -- Yellen filibustered.

Related: What a Yellen Taper Really Means for Stocks

While she said she was surprised at the slowdown in the pace of job creation in December and January -- rising 75,000 and 113,000, respectively -- she urged Congressional members not to jump to conclusions in interpreting that data. She said a notable change in the outlook would be required to alter the Fed's taper trajectory, and she said the Fed would be looking at a broad range of indicators on the labor market, growth, spending, and inflation in determining that.

Jim Rickards, author Currency Wars: The Making of the Next Global Crisis and the forthcoming The Death of Money: The Coming Collapse of the International Monetary System and portfolio manager of the Westshore Funds, tells us in the accompanying video to look for a pause in the tapering of bond buying mid-year, probably coming out of the June meeting.

"The Fed will say the policy is data dependent -- which it is, that's true -- but the data has been coming in weak," he tells us. Yet $10 billion in additional tapering in March is baked in the pie because that's the first meeting [Yellen's] chairing...so she's not going to walk into the room and tear up policy."

But Rickards says come May, June, July and the data comes in weak, look for a pause.

Check out the video to find out why Rickards says continuity of Fed policy means, "they've been making it up for the last five years and they are going to keep making it up."

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