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Yellen Ends Tenure With Concerns About Commercial Real Estate Pricing, Future Deregulation

On the eve of her last day as Federal Reserve Chair, Janet Yellen told CBS' "Sunday Morning" that U.S. stocks and commercial real estate prices are running hot.

Janet Yellen, Federal Reserve, the Fed, interest rates
Federal Reserve Chair Janet Yellen

“Well, I don’t want to say too high. But I do want to say high,” Yellen said during the interview. “Price-earnings ratios are near the high end of their historical ranges.”

Yellen expressed concerns regarding the elevation of asset valuations and warned that rolling back regulations placed on banks after the last recession would be a mistake, Bloomberg reports. The statement came on the heels of the incoming Fed chair, Republican Jerome Powell, being sworn in Monday after serving as Federal governor since 2012.

The commercial real estate sector has experienced rising valuations for more than eight years, a cycle that experts say is defying odds. Even so, growth is anticipated to continue, albeit slowly, into the next year with some economists saying it could be the strongest year since the financial crisis.

Despite her concerns about asset valuations, Yellen also said the financial system is in a much better place than it was prior to entering the financial crisis a decade ago. This means even if there is a decline in asset or stock prices, the financial system could bounce back more readily than in the past, Bloomberg reports.