Yellen on deficits and other issues - don' worry

Fed Chairman Yellen noted that government deficit will rise to unsustainable levels. No surprise here. No real market reaction from her comments. Nothing that would cause anyone in government to change. In fact later in her testimony,

Yellen notes that the tighter fiscal policy is creating a headwind which the Fed has to offset. Issue money with one hand and print money through buying debt with the other five years after the end of the recession. Action should be taken on labor markets but the current status quo will not get us there.

There is no action to be taken even if debt is unsustainable so we will just move forward with adding debt and monetizing to a slightly lesser degree as we cut QE. Don't worry about inflation, the Fed has the tools to solve if it happens. Don't worry about bubbles, the Fed is looking at systemic risks. Don't worry about income inequity we caused by trying to form a wealth effect. We can tax the rich and savers and redistribute. Don't worry about forward guidance even though the Fed has a poor forecasting record and guidance is not the same as action. Don't worry about slow growth in the first quarter, we will make it up in the rest of the year. It was only weather. Don't worry about labor markets, our policies will kick in.