Financial Times FT.com

Fed sees risks in low rates policy

BySarah O’Connor in Washington

Published: November 24 2009 21:23 | Last updated: November 24 2009 23:20

Federal Reserve officials have expressed concerns that near-zero interest rates could fuel “excessive risk-taking in financial markets” but believe the possibility of such an outcome is “relatively low”, minutes from its November meeting show.

Both China and Germany warned this month that the weak dollar and the Fed’s policy to keep US interest rates “exceptionally low” for an “extended period” could be laying the groundwork for a new speculative bubble.

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