Janet Yellen admits what keeps her up at night

Federal Reserve chairwoman Janet Yellen explained Thursday evening what’s keeping her up at night, and the answer, in a word, is China.

Appearing Thursday at Stanford University, Yellen was asked by economics professor John Cochrane about the biggest concerns keeping her up until late at night worried.

Officials at the Fed “spend a good deal of time monitoring what is happening in China, where growth is slowing,” Yellen responded.

She added that they are seeing financial developments that “could become problematic,” although she noted that she believes Chinese officials have those under control.

In recent years, she said, the list of global events “that have really kept us up at night” also includes the European economy, emerging economies, commodities markets, Greece’s fiscal situation, and more.

While some of those have not fully abated, she said, “there’s a little less to lose sleep about now, certainly going back to 2008, ’09, ’10.”

Nevertheless, she hinted, obliquely, that the Trump administration could also pose risks to the Fed in terms of renegotiating trade rules or otherwise dramatically reshaping U.S. economic policy.

“Uncertainty is prevalent, and policy could … end up behaving very differently than anything we’ve described,” she remarked.

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