Federal Reserve Chair Janet Yellen on Tuesday praised the policies of predecessor Ben Bernanke, hinting that the central bank will further taper monetary stimulus in the coming months.

"His leadership helped make our economy and financial system stronger and ensured that the Federal Reserve is transparent and accountable. I pledge to continue that work," she told the House Committee on Financial Services.

In her first public remarks since taking the top job at the Fed, Yellen said it would take a "significant deterioration" in the economic outlook or a risk of deflation to delay its slow exit from bond-buying.

The Fed is currently pumping $65 billion a month into markets, down from $85 billion in early December.

"If incoming information broadly supports the Committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings," Yellen said.

"That said, purchases are not on a preset course, and the Committee's decisions about their pace will remain contingent on its outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases."

She noted that the unemployment rate inched down in January to a 5-year low of 6.6 percent, but said that crossing the Fed's 6.5 unemployment target would not trigger an automatic hike in the benchmark interest rate from zero, as "the recovery in the labor market is far from complete."

The economy created only 113,000 jobs in January, up from 75,000 in December but short of the 274,000 in November.

Despite the winter lull that some are blaming on unusually bad weather, Yellen said the unemployment rate will continue to decline toward its longer-run sustainable level.

During a Q-and-A session, Yellen said she was surprised by the winter lull seen in the last two jobs reports. Asked whether the weak jobs data could have been caused by brutally cold weather, Yellen demurred.

"It is important to take our time to assess what the significance of this is," Yellen said. "My colleagues on the FOMC and I anticipate that economic activity and employment will expand at a moderate pace this year and next," Yellen said.

Problems in global finacial markets do not pose a substantial risk to the U.S. economic outlook, she added.

Fed members voted unanimously to taper the bond-buying program in January, but some have made the case for a more drastic reduction in monthly asset purchases.

Philadelphia Fed President Charles Plosser made the case for FMOC hawks this morning, re-stating his view that it is appropriate to end the asset purchase plan altogether.

"Reducing the pace of asset purchases to $65 billion a month is moving in the right direction, but that may prove to be insufficient if the economy continues to play out according to the FOMC forecasts," said Plosser, speaking in Delaware.

Plosser expects growth of about 3 percent and the unemployment rate to continue its steady decline and to reach about 6.2 percent by the end of 2014.

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