May be part of the market where investors need to be careful

Treasury Secretary Janet Yellen told CNBC on Thursday that there may be parts of the U.S. stock market in which investors should be cautious.

In an interview broadcast on “Closing Bell,” Yellen said she believed higher valuations of equities was understandable given the Federal Reserve’s accommodative monetary policy.

“Well, in part, we’re in a very low interest rate environment,” Yellen said. “And if valuations are very high, in a world where interest rates are very low, price profits, tight multiples tend to be high. Having said that, you know, maybe sectors … where we have to be very careful, ”added Yellen. , who took over as Treasury chief in late January under President 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 U.S. stock indexes to be trading near record highs during the coronavirus pandemic and its related economic damage. She also asked about large stock moves in initial public offerings and PSPCs.

Yellen did not specify which sectors she was referring to.

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

Yellen said she viewed bitcoin as a “highly speculative asset” and noted that it has experienced high levels of volatility in recent years. When asked if she thinks there is a need to regulate, Yellen said any action should be aimed at protecting investors.

“I think it’s important to make sure it’s not being used as a vehicle to secure transactions and that there is investor protection,” said Yellen, a former Fed chairman. “And so regulating the institutions that deal with Bitcoin, making sure they meet their regulatory responsibilities, I think that’s certainly important.”

Cryptocurrencies have been widely adopted lately by established financial companies. Mastercard said last week that it intends to support some cryptocurrencies on its official network, while BNY Mellon, the country’s oldest bank, will launch a unit of digital assets later this year.