On Friday, the Fed Chairman warned of excessive risk-taking in financial markets, according to the FT, and reiterated the Fed is aware of the risk of inflating dangerous asset price bubbles.

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The quest for higher yields is inflating a bubble in junk bonds, and investors are taking on more risk as they try to improve their performance.

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That, however, runs the risk that the Fed is cushioning the impact of the bursting of one bubble by inflating another in housing.

ECONOMIST: The American economy