Fed's Yellen: Low rates can fuel bubbles

When low interest rates stay too low for too long, easy money can fuel asset bubbles, Janet Yellen told a room full of economists Monday, in her first public remarks as the Federal Reserve's new vice chairwoman.

Yellen confirmed in her speech that the central bank is aware of some of the risks of its policy of holding rates at historic lows, but she didn't go so far as to hint at the Fed's next move.

"It is conceivable that accommodative monetary policy could provide tinder for a buildup of leverage and excessive risk-taking in the financial system," she told a packed ballroom at the National Association of Business Economics conference in Denver, Monday.

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- Posted: 2010-10-11 17:20:35

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