There are few signs of economy-threatening financial bubbles in the U.S. economy right now, Federal Reserve chairman Jerome Powell said Tuesday during his first testimony on Capitol Hill as head of the central bank.
“The financial stability picture shows, at most, modest risks,” Powell said during testimony before the House Financial Services Committee.
Critics of the Fed’s stimulus policies over the past decade, especially conservatives on Capitol Hill and President Trump himself, have warned that the central bank could risk inflating an asset bubble or sending inflation too high by keeping interest rates too low.
Powell acknowledged those fears in his commentary Tuesday, but said they are not materializing yet.
“This is a time when we need to be alert to the build-up of either financial imbalances or to inflation,” he said.
“We don’t really see those right now,” he concluded.
Some stocks and other assets may be too high, Powell allowed. But households and banks are not overly indebted the way they were prior to the financial crisis, in his estimation.
