Courtesy of Pam Martens
Source: Office of Financial Research (OFR)
By Pam Martens and Russ Martens
During the question and answer period of Federal Reserve Chairman Jerome Powell’s press conference on Wednesday, Michael McKee of Bloomberg News asked the Chairman the following question:
“I’m curious about the financial conditions that you see out there. The minutes of the March meeting tell us a few officials worried about financial stability risks. Was there a broader discussion at this meeting? Any consensus on whether such risks are growing as the markets hit new highs and we do see some instability in short-end trading. Is it possible that rates are too low at this point?”
Jerome Powell, Federal Reserve Chairman
Powell answered the first part of the question as follows:
“…I’d say that the headline really is that while there are some concerns around nonfinancial corporate debt, really the finding is that overall financial stability vulnerabilities are moderate on balance and, in addition, I would say that the financial system is quite resilient to shocks of various kinds with high capital liquidity…”
The curious thing about that answer is that there are, literally, charts flashing red at the Office of Financial Research (OFR), the Federal agency created under the Dodd-Frank financial reform legislation to keep the Fed and other Federal regulators informed of any growing financial stability risks.
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