YELLEN: We didn't see the financial crisis coming

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.

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