Outgoing Federal Reserve Chairman Janet Yellen is holding a news conference following a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, USA, on December 13, 2017.
Jonathan Ernst | Reuters
Finance Minister Janet Yellen told CNBC on Thursday that there may be parts of the U.S. stock market in which investors need to be careful.
In an interview broadcast on ‘Closing Bell’, Yellen said she believes higher valuation of shares is understandable given the Federal Reserve’s accommodative monetary policy.
“Well, in part, we’re in a very low interest rate environment,” Yellen said. “And while valuations are very high, price earnings in a world of very low interest rates tend to be high. That said, there you know, there may be sectors … where we need to be very careful,” Yellen added. , who took over as president at the end of January under President Joe Biden.
The comment follows the question from Sara Eisen, CNBC, who asked if Yellen believes that the major US stock indices traded near record highs during the coronavirus pandemic and the economic damage associated with it. She also asked about major stock movements in the initial public offering and SPACs.
Yellen did not specify which sectors she was referring to.
Bitcoin has also seen a big move in recent months and the world’s most valuable cryptocurrency broke above $ 52,000 for the first time on Wednesday.
Yellen said she views bitcoin as a “very speculative asset”, noting that in recent years there has been a high level of volatility. Asked if she believes it should be regulated, Yellen said any action should be about securing investors.
“I think it’s important to make sure it’s not used as a vehicle for transactions and that there’s investor protection,” said Yellen, former Fed chairman. “And so regulating institutions that trade in Bitcoin, and making sure they fulfill their regulatory responsibilities, is important.”
Cryptocurrency has been increasing at established financial firms recently. Mastercard said last week that it plans to support certain cryptocurrencies in its formal network, while BNY Mellon, the country’s oldest bank, will launch a digital asset unit later this year.