Janet Yellen Interview February 4, 2018

On February 4, 2018 there was an interview of Janet Yellen that aired on the CBS “Sunday Morning” show.  The interview was titled “Janet Yellen:  The exit interview.”

Below are segment excerpts and Janet Yellen’s comments I found most notable – although I don’t necessarily agree with them – in the order they appear in the interview:

Under Yellen’s leadership, the Board slowly raised interest rates, and also slowly started cutting back on bonds and other assets the Fed bought up to ease the recession.

It worked!  Inflation is now less than 2%, and unemployment — at 6.7% when she took office — has dropped significantly, to 4.1%.

“The labor market has become stronger,” Yellen said. “I believe that since I’ve become Chair, several million jobs have been created, [something] on the order of ten million.”

also:

As for whether Yellen’s view that the stock market (which plummeted on Friday) has been too high in recent months:

“Well, I don’t want to say too high.  But I do want to say high. Price-earnings ratios are near the high end of their historical ranges.  If you look at commercial real estate prices, they are quite high relative to rents.  Now, is that a bubble or is too high?  And there it’s very hard to tell.  But it is a source of some concern that asset valuations are so high.

“What we look at is, if stock prices or asset prices more generally were to fall, what would that mean for the economy as a whole?  And the financial system is much better capitalized. The banking system is more resilient.  And I think our overall judgment is that, if there were to be a decline in asset valuations, it would not damage unduly the core of our financial system.”

“We’re in the ninth year of a recovery; can it really keep going like this?” asked Braver.

“Yes, it can keep going.  Recoveries don’t die of old age!”

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 2722.07 as this post is written