Valuation of some assets somewhat rich, Fed's Yellen says

The head of the US central bank reiterated that a gradual path of policy tightening would likely be appropriate, adding that the valuations of some asset prices had become somewhat rich.

Speaking in London on Tuesday evening, Federal Reserve chair said "We've made very clear that we think it will be appropriate to the attainment of our goals to raise interest rates very gradually."

On the subject of valuations, she added that some of them "look high but there's no certainty about that".

"Asset valuations are somewhat rich if you use some traditional metrics like price earnings ratios, but I wouldn’t try to comment on appropriate valuations, and those ratios ought to depend on long-term interest rates," she said.

Earlier on Tuesday, her number two, Stanley Fischer, said valuations could only in part be attributed to an improved economic outlook.

In what some observers took to be a nod to concerns in some corners of the market about the recent move lower on inflation readings, Yellen said what would be a concern is inflation expectations appeared to be retreating.