WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen on Wednesday pointed to high valuations in the stock market and said the central bank needs to keep close tabs on the non-bank lending sector.

Yellen was answering questions from International Monetary Fund Managing Director Christine Lagarde at a "Finance and Society" conference here.

"I would highlight that equity market valuations at this point generally are quite high," Yellen said. "There are potential dangers there."

In a question from Lagarde about financial stability concerns, Yellen said that she sees risks as moderated and does not see any bubbles forming, though the central bank is watching the issue closely.

Yellen also pointed to open-ended mutual funds, and the potential liquidity risks the funds could face amid a wave of redemptions.

(Reporting by Michael Flaherty and Anna Yukhananov; Editing by Meredith Mazzilli)