Federal Reserve Chairman Janet Yellen is holding a press conference after a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, USA, on December 13, 2017.
Jonathan Ernst | Reuters
Treasury Secretary Janet Yellen told CNBC on Thursday that there could be parts of the US stock market in which investors should be cautious.
In an interview with Closing Bell, Yellen said he thought higher valuations of equity were understandable given the Federal Reserve’s accommodative monetary policy.
“Well, we’re partly in a very low interest rate environment,” Yellen said. “And while valuations are very high, in a world with very low interest rates, the gains in prices, the multiples tight tend to be high. we are very careful, “added Yellen, who took over as head of the Treasury in late January under President Joe Biden.
The comments came in response to a question from CNBC’s Sara Eisen, who asked if Yellen thought it made sense for major US stock indices to trade close to records during the coronavirus pandemic and its economic damage. She also asked about the large share moves in the initial public offerings and SPACs.
Yellen did not specify which sectors he was referring to.
Bitcoin has also seen a major move in recent months, and the world’s most valuable cryptocurrency broke more than $ 52,000 for the first time on Wednesday.
Yellen said he considered bitcoin an “extremely speculative asset” and said it had seen high levels of volatility in recent years. Asked if she thought it should be regulated, Yellen said any action should be about protecting investors.
“I think it’s important to make sure it’s not used as a vehicle for transactions and that there is investor protection,” said Yellen, a former Fed chairman. “And so regulating the institutions that deal with Bitcoin, making sure they comply with their regulatory responsibilities, I think is definitely important.”
Cryptocurrencies have generally seen an increasing adoption recently from established financial firms. Mastercard said last week that it intends to support certain cryptocurrencies in its formal network, while BNY Mellon, the nation’s oldest bank, will launch a digital asset unit later this year.