Wednesday, May 6, 2015

Yellen Warns of Potential Dangers

Much of what the Fed says through Fedspeak, a technique popularized by Greenspan that employing vague, ambiguous, and often technical jargon that could easily be interpreted as bullish, bearish, or neutral by financial market participants, still exists today regardless of claims of transparency. Yellen, following similar remarks made by Greenspan in 1996, suggests that equity valuation are high. A recent discussion of this debate under Long Term Charts - Composite Timing Indicator suggests she's either dangerously clueless about cycles or the definition of 'high' or is, indirectly, preparing the markets for the unexpected. The unexpected could include unexpected policy changes that buck accepted economic principles.

Headline: Fed's Yellen says equity valuations high, warns of 'potential dangers'

WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen on Wednesday pointed to high valuations in the stock market and said the central bank needs to keep close tabs on the non-bank lending sector.

Yellen was answering questions from International Monetary Fund Managing Director Christine Lagarde at a "Finance and Society" conference here.



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