ISTANBUL 

US Federal Reserve Chair Jerome Powell stated Tuesday that equity prices, a group that usually consists of stocks and other risky investments, are "fairly highly valued."

In a speech in the northeastern state of Rhode Island, the Fed chair was questioned if he and his colleagues have a greater tolerance for higher values and how much weight they lay on market pricing.

“We do look at overall financial conditions, and we ask ourselves whether our policies are affecting financial conditions in a way that is what we’re trying to achieve,” Powell said. “But you’re right, by many measures, for example, equity prices are fairly highly valued.”

As the central bank cut the policy rate last week for the first time this year, and the expectations for further rate cuts rose, the stock markets entered a rally of hitting record high levels.

“Markets listen to us and follow and they make an estimation of where they think rates are going. And so they’ll price things in,” Powell said

Powell said this is "not a time of elevated financial stability risks," although he pointed to high equity valuations.

After his remarks, the New York Stock Exchange took a downturn, after starting the day in positive territory.