The Fed has embraced the ‘punchbowl’ and has no intention of taking it away

The Fed has embraced the ‘punchbowl’ and has no intention of taking it away

The Federal Reserve has come a long way from the days of warning about "irrational exuberance."Former Fed Chairman Alan Greenspan famously sent up a flare in December 1996 about stretched asset valuations triggered by wild dotcom speculation that had produced an unbridled bull market.It took three years for the warning from "The Maestro" to come true, but the statement is still considered a seminal moment in market history where a Fed leader issued such a bold warning that went unheeded.Flash forward 25 years and the attitude from the Fed is considerably different, even though market valuations look a lot like they did back around the time the dotcom bubble first.Central bank officials repeatedly have been given the opportunity to advise caution on asset valuations, and each time they have largely passed. Other than acknowledging that prices are higher than normal in some instances, Fed speakers have largely attributed market moves as the product of an improving economy buoyed by aggressive fiscal stimulus and low interest rates that will be in place for years.

Just a few days ago, San Francisco Fed President Mary Daly spoke on the issue and said the Fed has no intention of tightening policy even in the