Fed Chief Powell says stock prices appear ‘fairly highly valued’
U.S. Federal Reserve Chair Jerome Powell addresses the media after the Federal Open Market Committee’s statement on interest rate policy in Washington, D.C., U.S., on September 17, 2025.
Elizabeth Frantz | Reuters
During a speech in Providence, Rhode Island, Federal Reserve Chair Jerome Powell acknowledged that asset prices, including stocks and other risk instruments, are currently at elevated levels.
When asked about the importance placed on market prices by him and his colleagues, Powell stated, “We do consider overall financial conditions and evaluate whether our policies are achieving our intended goals. However, it is true that equity prices are currently quite high by many measures.”
Leading up to the recent policy meetings, there was a significant rally in stocks and other assets as expectations grew for a reduction in the benchmark overnight borrowing rate by the Federal Open Market Committee. Following the decision to cut rates by a quarter percentage point, stock prices have continued to rise, reaching new record highs for major averages.
Powell emphasized the impact of the Fed’s communications on market movements, stating, “Markets pay attention to our signals and adjust their estimations of future rate changes accordingly. This is evident in how mortgage rates are priced.”
Despite acknowledging the elevated levels of equity prices, Powell reassured that the current financial stability risks are not a cause for concern.
