Yesterday, Federal Reserve Chair Janet Yellen was succeeded by Republican and Fed governor Jerome Powell, President Trump’s pick for the role, but that doesn’t mean she’s stopped making headlines. In fact, her last day was one for the books.
In a final interview taped Friday aired today, Yellen contemplated whether the American commercial real estate market was in a bubble.
The market’s prices are “quite high relative to rents,” she said in the interview which aired on CBS’s “Sunday Morning” show. “Now, is that a bubble or is it too high?” she said to CBS. “It’s very hard to tell. But it is a source of some concern that asset valuations are so high.”
Then, as her last act as chair, she slapped a ban on Wells Fargo late Friday after markets closed, according to Bloomberg.
The bank is now unable to grow its assets past its 2017 levels without the Fed’s permission until it has addressed internal oversights including meeting compliance standards and addressing long-standing customer abuses. The unprecedented ban left analysts in shock, though the Fed says it had been in the pipeline for awhile.
“This is akin to the last scene in ‘The Godfather,”’ said Compass Point Research & Trading’s Isaac Boltansky to Bloomberg. “Chair Yellen decided to handle unfinished business on her way out the door.”
Yellen was the Fed chair for one term and was the first woman to head the American central bank. [Bloomberg] — Erin Hudson