<p><img src="https://static3.businessinsider.com/image/602fb5d0d3570b00180927f1-2400/AP572454742114.jpg" border="0" alt="AP572454742114" data-mce-source="Manuel Balce Ceneta/AP" data-mce-caption="Janet Yellen previously suggested the use of cryptocurrencies like bitcoin should be 'curtailed'."></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><ul><li><strong>Low interest rates are helping stocks rise, but investors should be careful in some highly valued sectors, Treasury Secretary Janet Yellen said.</strong></li><li><strong>The crypto boom is also sounding alarms in Washington, she said, adding that bitcoin is a "highly speculative asset."</strong></li><li><strong>While stimulus has been blamed for risk-taking, Yellen argued additional aid is needed to fuel a full recovery.</strong></li><li><strong><a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell'utm_source=markets&utm_medium=ingest">Sign up here for our daily newsletter, 10 Things Before the Opening Bell</a>.</strong></li></ul><hr><p>Stimulus hopes and falling COVID-19 case counts have lifted stocks to record highs throughout February, but some pockets of the market could be overextended, Treasury Secretary Janet Yellen said Thursday.</p><p>The stock market's climb charged on through the week as optimism around an economic recovery offsets concerns of lofty prices. The Federal Reserve's accommodative policy stance plays a part in permitting such elevated valuations, but investors should still be cautious, Yellen said in an interview with <a href="https://www.cnbc.com/2021/02/18/cnbc-exclusive-cnbc-transcript-united-states-treasury-secretary-janet-yellen-speaks-with-cnbcs-closing-bell-today.html">CNBC</a>.</p><p>"While valuations are very high, in a world of very low interest rates, price-earnings, tight multiples tend to be high," she said. "That said, there may be sectors ... where we should be very careful."</p><p>The treasury secretary abstained from naming which sectors she was thinking of specifically.</p><p>Yellen also addressed the cryptocurrency boom that's taken Wall Street by storm. The adoption of <a href="https://markets.businessinsider.com/currencies/btc-usd">bitcoin</a> by Tesla, Mastercard, and BNY Mellon kicked off the next stage of a rally that's seen prices skyrocket through 2021. The world's largest cryptocurrency hit a record-high of nearly $53,000 Friday morning, bringing its year-to-date gains above 80%.</p><p>Yet as public companies embrace the token and the broader cryptocurrency market, Yellen remains wary. Bitcoin is a "highly speculative asset" that should be closely monitored as its use multiplies, she said.</p><p>"It's important to make sure that it is not used as a vehicle for illicit transactions and that there's investor protection," Yellen said. "Regulating institutions that deal in bitcoin, making sure that they adhere to their regulatory responsibilities, I think is certainly important."</p><p>Sweeping fiscal support has deemed one driver behind the stock and crypto markets' uptrends. Still, Yellen signaled the government is far from pulling back on stimulus. While progress toward a full recovery has been made, the true unemployment rate is still close to 10%, she said. Passing President Joe Biden's $1.9 trillion aid proposal is crucial to recuperating lost jobs and reviving economic activity, Yellen added. </p><p>"We're digging out of a deep hole," the treasury secretary said. "We think it's very important to have a big package that addresses the pain this has caused."</p><p><a href="https://markets.businessinsider.com/currencies/news/stock-market-sectors-investors-careful-janet-yellen-bitcoin-cryptocurrencies-stimulus-2021-2-1030102060#comments">Join the conversation about this story »</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/what-if-jump-off-international-space-station-2018-6">What would happen if you jumped off the International Space Station</a></p>
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