Yellen Warns Of “Algo Presence” In Markets, Fears “Risks Of Excessive Optimism”
by Tyler Durden
ZeroHedge.com
Aug 25, 2017
While we will not see her speech or Q&A, the much anticipated speech on financial stability from Janet Yellen has just dropped. While expectations were for a ‘snoozefest’ speech, market volatility heading in suggested more than a little anxiety. While the core of her speech pushed back against easing financial reforms, she fears “risks of excessive optimism returning sooner or later” in financial markets and warns of the “larger presence of algorithmic traders in markets.”
Headlines include:
*YELLEN: ALGORITHMIC TRADERS A LARGER PRESENCE IN MARKETS
*YELLEN: ANY CHANGES TO FINANCIAL REGULATIONS SHOULD BE `MODEST’
*YELLEN: RISKS OF EXCESSIVE OPTIMISM TO RETURN ‘SOONER OR LATER’
*YELLEN: CORE REFORMS BOOSTED FINANCIAL SYSTEM’S RESILIENCE
Here are key highlights from Yellen’s prepared remarks, via Bloomberg:
Fed’s Janet Yellen said more resilient, post-crisis U.S. financial system “is better prepared to absorb, rather than amplify, adverse shocks,” yet “there is more work to do” and “we can never be sure that new crises will not occur.”
Policy makers, investors should continue to monitor indicators of financial-system resilience, Yellen said Friday in text of speech at Kansas City Fed’s annual symposium in Jackson Hole, Wyoming.
“All-too-familiar risks of excessive optimism, leverage, and maturity transformation” will re-emerge “sooner or later” in new ways that require policy responses, given technology, regulation and evolution of financial system
Market-based measures may not reflect true risks; supervisory metrics “are not perfect, either”
The Rest…HERE
