The Federal Reserve released the minutes from its most recent FOMC meeting on Wednesday and it appears the monster they created has finally spooked the central bankers.
The Fed was pretty optimistic about the prospects for continued economic growth, but expressed concern that financial markets might be getting out of hand.
In light of elevated asset valuations and low financial market volatility, several participants expressed concerns about a potential buildup of financial imbalances,’ the minutes said. ‘They worried that a sharp reversal in asset prices could have damaging effects on the economy.’
The central bankers at the Fed aren’t the only ones worried about the ballooning stock market bubble, although they don’t call it that. Last week, a Bank of America analyst called overvalued equities combined with simultaneously falling cash positions ‘an indicator of irrational exuberance.’
This post was published at Schiffgold on NOVEMBER 24, 2017.