Market Watch: Fed Governor Warns That the Stock Market is Susceptible to a 'Large Decline'
Article by Steve Goldstein in Market Watch
Fed Gov. Lisa Cook wasn't mincing words in her speech that examined the economic outlook and financial stability.
"Valuations are elevated in a number of asset classes, including equity and corporate debt markets, where estimated risk premia are near the bottom of their historical distributions, suggesting that markets may be priced to perfection and, therefore, susceptible to large declines, which could result from bad economic news or a change in investor sentiment," said Cook.
That's stronger language than used in the Fed's financial stability review authored in November. That report said "valuations continued to rise in U.S. equity markets from .....