Federal Reserve Chair Janet Yellen on Wednesday warned that equity market valuations were “quite high,” though she said the Fed was not seeing the hallmarks of a bubble.
She also noted that the Fed was watching the issue closely. “I would highlight that equity market valuations at this point generally are quite high,” Yellen said, according to Reuters. “There are potential dangers there.”
Stocks, which had turned lower after a strong open, fell further following Yellen’s comments. “She’s really raising those questions that valuations are pretty full. I agree with that,” said David O’Malley, CEO of Penn Mutual Asset Management.
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