"This Wasn't A Big Drop": Dudley Reveals That The "Powell Put" Is Far Lower

For those hoping that the "Powell Put" is struck at least as high as Yellen's, The New York Fed's Bill Dudley may have just dashed those hopes a little...

As a reminder,on her way out, former Federal Reserve Chair Janet Yellen told CBS that the market's valuations were high but said she wasn't sure if markets were currently in a bubble.

"Well, I don't want to say too high. But I do want to say high. Price/earnings ratios are near the high end of their historical ranges," Yellen said.

"Now, is that a bubble or is too high? And there it's very hard to tell. But it is a source of some concern that asset valuations are so high."

Earlier today, Dallas Federal Reserve Bank President Robert Kaplan joined a chorus of central bank officials who have called the stock market overvalued at recent levels.

Kaplan said the recent selloff is "basically a market event and these things can be healthy."

St. Louis Fed President James Bullard said that the recent market selloff was predictable because of the elevated valuation of tech stocks.

"This is the most predicted selloff of all time because the markets have been up so much and they have had so many days in a row without meaningful down days,'' Bullard said, according to the Financial Review.

"So it is probably not surprising that something that has gone up 40% like the S&P tech sector would at some point have a selloff. Before there was a selloff, people said repeatedly some day this will sell off."

The fact that there was a selloff wasn't concerning to Bullard, but he admitted that the speed of the decline was probably aided by the role algorithmic tradings plays in the market.

"What is more interesting is it has been very fast, it's been possibly aided and abetted by technical trading -- algorithmic trading. I'd be interested to see an analysis and see what role that played," Bullard said.

And then, the New York Fed's Bill Dudley says an equity rout like the one that occurred in recent days "has virtually no consequence for the economic outlook."

Adding that, if it continued to go down sharply, “that would affect my view,” he says at event in New York, but "this wasn't that big of a bump in the stock market" and " is not a big story for central bankers yet."

“It’s still up sharply from where it was a year ago”

In other words, it's going to take more than a 13% plunge in 5 days to stir Jay Powell's Plunge Protection Team into action...