Federal Reserve Chair Janet Yellen said equity-market valuations are “quite high” and could be a potential source of financial instability.

“I would highlight that equity-market valuations at this point generally are quite high,” Yellen said in Washington on Wednesday in a response to a question at a forum on finance.

“Now, they’re not so high when you compare the returns on equities to the returns on safe assets like bonds, which are also very low, but there are potential dangers there.”

The Standard & Poor’s 500 Index is trading near its record close of 2,117.69 on April 24. The benchmark gauge for American equities has nearly tripled since plunging to a 12-year low during the financial crisis in March 2009.

The S&P 500 trades at 18.4 times earnings, near a five-year high of 18.7 times reached in February.

Yellen said that after holding rates near zero since December 2008, the Fed must be on the lookout for threats to financial stability. She said she sees signs of “reach for yield” in the market for leveraged loans, and that bond yields could jump when the central bank raises its benchmark rate.

“Long-term interest rates are at very low levels,” Yellen said. “We could see a sharp jump in long-term rates” after liftoff. Most Fed officials predict they will raise rates this year for the first time since 2006.

“We saw this in the case of the taper tantrum in 2013, where there was a very sharp upward movement in rates,” she said in reference to the episode in the middle of that year, when then-Chairman Ben S. Bernanke suggested that the Fed could start tapering its bond purchases in the next few meetings.