Falling corporate bond spreads and volatility indicators are signs that investors may not fully appreciate the risk of future losses, Fed Chair Janet Yellen warned on Wednesday.
Taking a variety of factors into consideration, “I do not presently see a need for monetary policy to deviate from a primary focus on attaining price stability and maximum employment, in order to address financial stability concerns,” she said.
“That said, I do see pockets of increased risk-taking across the financial system, and an acceleration or broadening of these concerns could necessitate a more robust macroprudential approach,” Yellen said in prepared remarks for a speech at the International Monetary Fund.
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