- Yellen said regulators are looking in detail at January's Reddit-fueled market frenzy.
- They will make policy decisions, including the possibility of new regulations, from those facts.
- Despite the volatility, the infrastructure of the markets "performed well," she said.
- Visit the Business section of Insider for more stories.
Treasury Secretary Janet Yellen said on Sunday regulators are still examining whether new policies are needed to address recent market volatility spurred by retail investors in forums like Reddit's Wall Street Bets.
The crowd of casual investors took the stock market by storm in January by bidding up highly shorted stocks like GameStop and AMC, burning hedge funds. Accusations of market manipulation on the online forums have since drawn interest from regulators and Congress.
"We really need to look in detail to understand what happened in those stocks over the last couple of weeks," Yellen said in an interview on CBS' Face the Nation.
"But I would say that the core infrastructure of the markets, the plumbing, ability to trade, clearing settlement, those infrastructures performed well. But we need to make sure that investors are adequately protected, she said.
—Face The Nation (@FaceTheNation) February 7, 2021
Last week, the Treasury secretary met with the Federal Reserve, Commodities Futures Trading Commission, and the Securities and Exchange Commission to discuss the trend and potential wrongdoing.
"The SEC has promised to produce a report that will give us a better factual understanding of exactly what happened. And I think we shouldn't be drawing policy conclusions until we understand what happened," Yellen said on Sunday.
It also prompted scrutiny of no-fee stock trading apps like Robinhood, the popular platform also used by many Redditors. The House Financial Services Committee is set to meet on February 18 to discuss Robinhood's response to the GameStop rally, including its decision to temporarily restrict trading in certain stocks.