1:14 AM » Fed's Williams sees no asset bubbles from QE
WASHINGTON (MarketWatch) - The Federal Reserve's latest round of bond buying has not led to asset bubbles, John Williams, the president of the San Francisco Federal Reserve Bank, said Monday. While it is a legitimate concern that the Fed's actions could contribute to "excessive risk-taking," as investors sometimes are reckless in seeking higher returns, most indicators of financial-market conditions still point to a climate of "heightened risk aversion," Williams remarked in a speech at the University of California at Irvine. "Memories of 2008 are simply too close for most financial-market participants to go on a limb," he noted. "If the situation were to change significantly, we could modify our unconventional policies to mitigate undesired effects on risk-taking," Williams said, without going into specifics. In the wake of the financial crisis, the central bank and the Treasury Department have set up and staffed new divisions to watch market conditions more closely and alert officials to imbalances or excesses.