Is the Federal Reserve Creating the Next "Great Recession"?

The summer issue of The International Economy magazine contains a feature that deserves some attention, even from those who don’t fully understand all the intricacies of economics. It is a cover package called “The Great Bubble Debate,” and it explores the doctrinal conflict that has emerged between Federal Reserve chair Janet Yellen and the Bank for International Settlements, which is an organization of the world’s central banks that “fosters international monetary and financial cooperation” and provides banking services to central banks.
The settlement bank’s recently released annual report argues that the Fed’s current monetary stimulus policies, coupled by similar policies at other central banks, could create another major financial bubble that could prove disastrous when it bursts. The report states that persistently low interest rates, like those maintained by the Fed since the Great Recession, “can also have the perverse effect of incentivizing borrowers to take on even more debt, making an eventual rise in rates even more costly if debt continues to grow….[L]ow interest rates do not solve the problem of high debt.”

http://nationalinterest.org/feature/the-federal-reserve-creating-the-next-great-recession-11314