Federal Reserve chair Janet Yellen says the Fed did not see the financial crisis coming.
“We saw trees, and the house price bubble was a tree,” Yellen said Friday at Harvard University’s Radcliffe Day, where she received the Radcliffe Medal.
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 chair Ben Bernanke did a “magnificent” job in steering policy to heal the economy after the Great Recession.
On future monetary policy — what most people were 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.