Fed Chair Yellen Believes Stocks Are Expensive

Janet Yellen, Federal Reserve Chair and one of the most influential people in the financial word, believes stock and bonds are priced at high levels. “I would highlight that equity market valuations at this point generally are quite high,” said Yellen. She also said equities aren’t as high as bond yields are low, in comparison. Bond yields “could see a sharp jump” after the Fed raises rates (likely sometime this year). Some investors are concerned the market will react strongly negative when the Fed finally does go through with a rate hike, especially if the central bank chooses to raise rates too quickly. The negative impact to the market is one (of several) reasons why Yellen and the Fed are so cautious about upping the benchmark rate. Regardless, when the Fed chief says stocks are expensive, you can bet investors are paying attention. (VIEW LINK)