Federal Reserve press conference, 2014-06-18 — Chair Janet Yellen

Question (Peter Barnes, Fox Business): Peter Barnes with Fox Business, ma’am. Can I—just to follow up a little bit on what Pedro asked about. Specifically, what about equity markets? I mean, right now, today, the S&P 500 is on track to close at a—another record high. You have said that you have not seen any evidence of bubbles in equity markets, and that they have been trading within historic norms. Is that still the case today? Thank you.
Answer: So I don’t have a sense—the Committee doesn’t try to gauge what is the right level of equity prices. But we do certainly monitor a number of different metrics that give us a feeling for where valuations are relative to things like earnings or dividends, and look at where these metrics stand in comparison with previous history to get a sense of whether or not we’re moving to valuation levels that are outside of historical norms, and I still don’t see that. I still don’t see that for equity prices broadly.