While the Federal Reserve has given stress tests to the nation's banks since the financial crisis, the Fed chair's semi-annual testimony before both houses amounts to Congress' own version of stress testing the nation's top central banker.
But in her first of two days of appearances on Capital Hill, Fed Chair Janet Yellen's so-called Humphrey-Hawkins testimony looked more like an edition of "Dancing With The Stars" than a stress test. One of the key gauges of that is her ability to avoid roiling the financial markets which have been on a roll lately.
She publicly voiced what had been indicated in minutes of the June meeting released last week, that asset purchases are likely to end after the October Federal Open Market Committee. Yellen noted that while progress is being made to improve the economy, "the recovery is not yet complete."
Most Americans and members of the Senate Banking Committee facing her in the wood-paneled room of the Dirksen Senate Office Building would agree the economy hasn't returned to something approaching normal.
On a more positive note, she said that payroll gains have averaged 230,000 jobs per month over the past six months. But she said the economy has flashed deceiving signals before. She called them "false dawns" where the Fed has been "unfortunately optimistic."
She said the surprising decline in first-quarter gross domestic product was "mostly from transitory factors," and the housing market "has shown little recent progress."
The unemployment rate remains high and "labor force participation appears weaker than one would expect," Yellen said. " These and other indications that significant slack remains in labor markets are corroborated by the continued slow pace of growth in most measures of hourly compensation."
One of the most vocal opponents of FOMC policy, Sen. Mike Crapo, R-Idaho, urged President Obama to appoint a community banker to the Federal Reserve Board. Yellen said she supports the notion of having a colleague with community banking experience but said she'd oppose any effort to use legislation to mandate any such requirement.
Yellen has spoken increasingly about the possibility of using the Fed's tools to knock the air out of financial bubbles. Among those she's watching include low-rated corporate debt and the leveraged loan market. She said low rates can provide "dangerous" incentives for some investors to reach for yield. She said broad-based risks are not being seen and are "more isolated."
So, Yellen's latest dance with Congress appears to have gone smoothly. Corporate economist Alan MacEachin said he heard nothing new in the testimony.
One lesson we know from history: The economy will present unforeseen challenges for Yellen and her central bank colleagues. Whether they can remain poised is something history, financial markets and Americans will all judge.
In her blog, Mesirow Financial chief economist Diane Swonk said that Yellen's testimony was "clear, concise and sure to confuse Congress."
Follow me on Twitter: @Hamrickisms