YELLEN: We didn't see the financial crisis coming
Thomson Reuters
"We saw trees, and the house price bubble was a tree," Yellen said Friday at Harvard University, where she was awarded the Radcliffe Medal.
"We really didn't see that coming," she said.
She said the explosion in leverage was a clue, but the Fed did not see it evolving into a full-blown crisis.
Yellen said former Fed chairman Ben Bernanke did a "magnificent" job in steering policy to heal the economy after the Great Recession.
He was the "right person with the right intellectual background and courage to think outside the box," Yellen said.
On future monetary policy - what most people were really listening in to hear about - Yellen said a rate hike in the coming months may be appropriate.
This isn't new, of course. Minutes from the Fed's April meeting made specific reference to June as a possible time for a rate hike.
Yellen repeated that if rates rise too quickly and there's a severe market or economic downturn, there are limited policy tools the Fed would have to respond.
We'll hear from Yellen again on June 6, when she speaks at a World Affairs Council event in Philadelphia.
- A centenarian who starts her day with gentle exercise and loves walks shares 5 longevity tips, including staying single
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- FSSAI in process of collecting pan-India samples of Nestle's Cerelac baby cereals: CEO
- India's e-commerce market set to skyrocket as the country's digital economy surges to USD 1 Trillion by 2030
- Top 5 places to visit near Rishikesh
- Indian economy remains in bright spot: Ministry of Finance
- A surprise visit: Tesla CEO Elon Musk heads to China after deferring India visit
- Unemployment among Indian youth is high, but it is transient: RBI MPC member