Dallas Fed chief: Bond-buying program likely helping to boost stocks

• “It’s a derivative of QE when we buy bills and we inject more liquidity; it affects risk assets. This is why I say growth in the balance sheet is not free. There is a cost to it.”

Why it matters: Fed chair Jerome Powell and other members of the U.S. central bank have insisted that the bond buying is merely an effort to stabilize the repo market and keep its target rate in line.

• However, analysts have pointed out that the program is eerily similar to what the Fed did following the financial crisis to help stimulate the U.S. economy's recovery.
• It's somewhat quizzical that the central bank would be deploying it at a time when it asserts the economy is strong and the outlook is bright.

The intrigue: It's not just the bond buying, Kaplan said.

• The combination of low interest rates, the perception that there is a high bar for the Fed to raise rates, and the expansion of its balance sheet "are contributing to elevated risk-asset valuations. And I think we ought to be sensitive to that,” he said.

Go deeper: The market will need the Fed again in 2020