Powell Sees Some Asset Prices as High

Q: Is there a concern on asset prices (re Gamestop, Dogecoin) from the Fed at this time?

- A: We have a broad financial stability framework. Many just look at asset prices and some froth in the equity markets. But really we try to stick to a framework for financial stability. I would say some of the asset prices are high. You are seeing things in the capital markets that are a bit frothy.

• That's a fact. I won't say it has nothing to do with monetary policy. But it has tremendous amount to do with vaccination and reopening of the economy. That's really what has been moving markets a lot in the last few months is the turn from what was a pretty dark winter to now a much faster vaccination process and a faster reopening.
• That's part of what's going on. Leverage in the financial system is not a problem. With the fiscal transfers, money on household balance sheet, they're in good shape. You see relatively low defaults. The overall stability picture is mixed. On balance it's manageable.