There’s a curious combination of messages that came from Federal Reserve officials on Tuesday.
Fed Chairwoman Janet Yellen told an audience in London that asset valuations are “somewhat rich.”
Fed Vice Chairman Stanley Fischer told an International Monetary Fund event that price-to-earnings ratios now stand in the top quintiles of their historical distributions.
And San Francisco Fed President John Williams gave the bluntest assessment, telling an Australian television station that the stock market is running on “fumes.”
PG View; Given the Fed’s history of overly-optimistic assessments, I think the real message is that the stock market is vulnerable to a sharp correction.