Fed's Yellen testimony: Balance sheet reduction will likely begin this year

Additional headlines from the pre-released text of the speech by Fed Chairwoman Janet Yellen's first part of 2-day semi-annual testimony in Congress:

• Inflation-adjusted gross domestic product is currently estimated to have increased at an annual rate of only 1-1/2 percent in the first quarter
• Recent lower readings on inflation are partly the result of a few unusual reductions in certain categories of prices
• With further gradual adjustments in the stance of monetary policy, the economy will continue to expand at a moderate pace over the next couple of years
• Considerable uncertainty always attends the economic outlook
• Possible changes in fiscal and other government policies here in the United States represent another source of uncertainty
• Changing the target range for the federal funds rate is our primary means of adjusting the stance of monetary policy