They may be parts of the market where investors need to be careful


Outgoing Federal Reserve Chair Janet Yellen gives a press conference following 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 where investors should be careful.

In an interview aired on “Closing Bell,” Yellen said he believes the higher valuations of the stocks are understandable given the Fed’s accommodative monetary policy.

“Well, we are partly in a very low interest rate environment,” Yellen said. “And while valuations are very high, in a world of very low interest rates, earnings by price, adjusted multiples tend to be high. That said, there may be sectors … where we should be very careful.” Yellen added. , who took over as head of the Treasury in late January under the presidency of 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 near all-time highs during the coronavirus pandemic and related economic damage. He also asked about large stock movements in initial public offerings and SPACs.

Yellen did not specify which sectors he was referring to.

Bitcoin has also seen a huge move in recent months and the world’s most valuable cryptocurrency surpassed $ 52,000 for the first time on Wednesday.

Yellen said that he considers Bitcoin to be a “highly speculative asset” and noted that it has experienced high levels of volatility in recent years. When asked if he thinks it is necessary to regulate it, Yellen said that any action must be aimed at protecting investors.

“I think it is important to make sure that it is not used as a vehicle to generate transactions and that there is protection for investors,” said Yellen, former chairman of the Fed. “And then, regulate the institutions that operate with Bitcoin, making sure they comply with its regulatory responsibilities, I think it’s certainly important. “

Cryptocurrencies in general have seen more adoption lately by established financial firms. Mastercard said last week that it intends to support certain cryptocurrencies on its formal network, while BNY Mellon, the country’s oldest bank, will launch a digital asset unit later this year.

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