Fed Chairman Jerome Powell spoke at a press conference on interest rate policy issued by the Federal Open Market Committee on September 17, 20025.
Elizabeth Frantz | Reuters
Fed Chairman Jerome Powell pointed out on Tuesday that asset prices are higher in categories that typically include stocks and other risk tools.
In a speech at Providence, Rhode Island, central bank leaders were asked what he and his colleagues focused on market prices and their higher tolerance for higher values.
“We did look at the overall financial situation and we asked ourselves if our policies affect the financial situation in the way we were trying to achieve,” Powell said. “But from many measures, you’re right, for example, stock prices are pretty high.”
At last week's policy meeting, stocks and other assets rebounded strongly as beliefs grew stronger, as the FAP was believed to lower its benchmark overnight lending rate. Stocks have continued to climb since Wednesday's decision to drop by a quarter-point percentage point, creating a series of record highs for the main average.
“The market listens to us and follows us, and they estimate where they think the rates go. So, they'll price it for that.”
Although Powell pointed to the lofty equity value, he said this is not a “time of rising risks in financial stability.”
After Powell commented, the stock lowered the turn, mainly averaging all trades in red.