It reads like a warning from Homeland Security.

 “Vulnerabilities (to the financial system) associated with asset valuation pressures have edged up from notable to elevated as asset prices remained high or climbed further…”                                    

 The opinion above can be found in the Fed’s most recent meeting minutes.  While it is uncertain how widely held the opinion is among committee members, it catches the attention of those who are inclined to wade through such otherwise academic readings.

 Raising interest rates appears to be an appropriate response to rich asset valuations but the Fed declined such action in July, citing concern that inflation remains too low.  The committee still appears committed to a “gradual” pumping of the brakes but all agreed mid-summer wasn’t the time.

 And so the party on Wall Street continues, largely unfazed by threats from North Korea, drama on Pennsylvania Avenue or talk of less accommodative monetary policy sometime in the future.

 However it remains notable – if not a bit satisfying – that some members of the Federal Reserve have joined the familiar refrain of the prudent investor shared on this blog.  As some Federal Reserve committee members assert, “low yields (are) inducing investors to take on excessive risk in a search for higher returns.”  You’ll find no argument here.