Fed's George: Fed's large balance sheet poses potential threat to financial stability

Kansas City Federal Reserve Bank President Esther George crossed the wires, via Reuters, saying that the Fed's large balance sheet was posing a potential threat to the financial stability.

Key quotes (via Reuters):

• I favor starting to trim balance sheet in near future
• Flat yield curve can distort investment decisions
• Current asset valuations, low volatility may signal financial market complacency
• Fed's large balance sheet poses potential threat to financial stability
• She is reluctant to support future Fed bond buying except in extraordinary circumstances
• Holding long-term rates low amid improving economy risks creating financial imbalances