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CNBC News Associate
As the Fed concludes its two-day meeting, most on Wall Street expect interest rates to remain low for the immediate future. But will that cause asset bubbles in stocks, real estate and currency markets? Beth Ann Bovino, senior economist at Standard & Poor’s, shared her outlook.
“We are concerned that there is certainly a lot of liquidity that’s out there and a lot of cash that’s going into few items and it’s pushing prices higher,” Bovino told CNBC.
“The Fed is going to be concerned about that, and given the numbers that are coming out—the economic indicators are starting to show some promise."
Bovino said the Fed may be forced to change the statement "a little bit." And while the current Fed statements indicate that the economy is seeing signs of a recovery in process, it could "turn around on a dime," she added.
“So the Fed may change the extended period of time, that's something that markets are probably too optimistic about—they may change it to 'sometime'—mainly to appease the hawks," she said.
"But inflation is relatively tame near-term, so they do have some room to move.”
More Perspectives on the Fed:
- Fed Won't Raise Rates For a Year: Investment Manager
- Market Insider: Will Fed Change Its Tune?
- Federal Reserve Seen Staying on Easy-Money Path
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CNBC's Companies in the News:
Citigroup [C
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Berkshire Hathaway [BRK.A
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Goldman Sachs [GS
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Fannie Mae [FNM
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Merck [MRK
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Schering Plough [SGP
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Disclosures:
No immediate information was available for Bovino or her firm.
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Data is a real-time snapshot *Data is delayed at least 15 minutes