Janet Yellen might be sending a sign to the markets to pump the breaks a little bit here. In her testimony before Congress this morning she gave her overview of the state of the financial markets:
“The Fed says house prices are within historic norms, as measured by price-to-rent ratios. However stock market valuations for small firms, social media and biotechnology firms “appear to be stretched.” Meantime risk spreads on corporate bonds have reached all-time lows, a sign of over-valuation.”
Then again, she also made it clear that she’s not ready to end the stimulus programs any time soon and that she’s not thinking about interest rate increases too much. So her actions might speak louder than her words here….
Not to mention the fact that, despite being Fed Chief, Janet Yellen doesn’t understand the concept of “value” relative to what is a proper “value”, any better than anyone else pretending to do so….