Federal Reserve Governor Lisa Cook has warned that the stock market is at risk of a significant decline due to high valuations. In a speech examining economic outlook and financial stability, Cook stated that asset classes such as equities and corporate debt markets are priced “to perfection,” making them susceptible to large drops in response to bad economic news or a change in investor sentiment.
This more forceful language is stronger than the Fed’s November financial stability review, which noted rising valuations in US equity markets but did not express such concern. Despite Cook’s warning, the stock market has remained unchanged, with the S&P 500 reaching new heights above 6,000.
Source: https://www.marketwatch.com/livecoverage/stock-market-today-dow-futures-rise-as-chip-stocks-advance/card/fed-governor-warns-that-the-stock-market-is-susceptible-to-a-large-decline–tcqjhJaZZK6PIH7f3Ma3