The Senate is expected to vote Monday evening on President Obama's Fed chair pick, Janet Yellen. While Yellen is expected to take the reins from Ben Bernanke as central bank chair February 1 after his term expires, the fate of the Fed's policy moves is less clear.
 
Related: Yellen Sees No Bubbles; Stockman Sees Them “Everywhere”

The Fed this month begins scaling back it's bond buying from $85B per month to $75B. The stock market has taken that news just fine, rallying after the Fed made the policy announcement in December and continuing an ascent to the best yearly gains since the 1990s.

Related: Jim Rickards: Don't worry Wall Street, the Fed's (still) got your back

The 10-year treasury yield, meanwhile, has risen to the "psychologically important" 3% level, but still, no one seems to be panicking.

The Daily Ticker sat down with Yahoo Finance Senior Columnist Michael Santoli to talk about what's next.

"It's smooth sailing for now because it's going as expected," Santoli says of Fed policy. "I think the market is okay with this very gentle, well-telegraphed path of reduced help from the Fed. What could not be as smooth as we have so far seen is if we get a good run of economic data."

Then, Santoli says the taper debate goes from "when" and "how much," to "are they already behind the curve?"

He points out that just Friday, Philadelphia Fed President Charles Plosser said the central bank may need to be more aggressive in raising interest rates.

Related: Forget the Fed, Interest Rates Are Heading Lower, Shilling Says

When it comes to economic improvement already behind us, GDP grew at the fastest rate in almost two years in the third quarter at a 4.1% annualized rate. The unemployment rate is at 7%, or the lowest it’s been in five years. We'll get an update on the labor market when the December jobs report is released on Friday.

But has the economy gained enough traction to withstand a continued reduction in QE, particularly when it comes to interest rate sensitive sectors that have benefited from the Fed's policies, including housing and cars?

Looking at autos, for example, the six biggest automakers in the U.S. market missed December sales expectations, but 2013 will still be the best year for the industry since before the recession. Check out the video to see what Santoli thinks.

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