Treasury Secretary Janet Yellen told CNBC on Thursday that
there could be parts of the U.S. stock market in which investors should
In an interview that aired on “Closing Bell,” Yellen said
she believes higher equity valuations are understandable given the
accommodative monetary policy from the Federal Reserve.
“Well, partly we’re in a very low interest rate
environment,” Yellen said. “And while valuations are very high, in a world of
very low interest rates, price earnings, tight multiples tend to be high. That
said there, you know, may be sectors ... where we should be very careful,”
added Yellen, who took over as Treasury chief in late January under President
The comments came in response to question from CNBC’s Sara
Eisen, who asked whether Yellen thought it made sense for the major U.S. stock
indexes to be trading near record highs during the coronavirus pandemic and its
related economic damage. She also asked about big share moves in initial public
offerings and SPACs.
Yellen did not specify which sectors she was referring to.
Bitcoin also has seen a big move in recent months and the
world’s most valuable cryptocurrency broke above $52,000 for the first time
Yellen said she considers bitcoin a “highly speculative
asset” and she noted that it’s seen high levels of volatility in recent years.
Asked whether she believes it needs to regulated, Yellen said any action must
be about safeguarding investors.
“I think it’s important to make sure that it is not used as
a vehicle for elicit transactions and that there’s investor protection,” said
Yellen, a former Fed chair. “And so regulating institutions that deal in
Bitcoin, making sure that they adhere to their regulatory responsibilities, I
think is certainly important.”
Cryptocurrencies broadly have seen increased adoption lately
from established financial firms. Mastercard said last week that it intends to
support certain cryptocurrencies on its formal network, while BNY Mellon, the
nation’s oldest bank, will launch a digital assets unit later this year.
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