Janet Yellen: No Bubble, “In Aggregate”


On the central bank front, US Fed Chair Janet Yellen’s semi-annual monetary policy report to Congress offered few surprises in terms of the outlook for monetary policy. The overriding message is that the Fed will continue to support the recovery as “too many Americans remain unemployed”.

Yellen did offer her opinion on equity market valuations noting that “valuation measures for the overall market in early July were generally at levels not far above their historical averages, suggesting that, in aggregate, investors are not excessively optimistic regarding equities”.

However, she did concede that valuations looked “stretched” in lower rated corporate debt, small cap companies and some social media and biotechnology stocks.

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