A Federal Reserve governor is saying record-low interest rates have so far produced only isolated signs of excess in the economy but that the central bank must remain vigilant.
Jerome Powell says low rates helped pull the country from the Great Recession and toward a healthy job market. But he also says rates that stay low for a long time can lead to excessive risk-taking, as seen in the dot-com and housing bubbles of the last two decades. He made the remarks Saturday at an American Finance Association meeting in Chicago.
Powell says he does not see broadly unsustainable prices for investments, even after rates remained at or near record lows since 2008. He cited some isolated signs of excess, including high prices for commercial real estate in some areas.