Bank chief executives have spent the past few months telling investors not to worry about rising interest rates. Most have said their banks are not taking risks in the bond market and are protected from losses.
One Federal Reserve governor doesn’t agree. On Thursday, governor Jeremy Stein became the latest high profile person to publicly worry about what a bond bubble could do to the financial sector and the economy. In a speech at a symposium in St. Louis, Stein talked about how or if the Fed should respond.