Photo: Jonathan Newton/The Washington Post via Getty Images

The bond-buying program the Fed began in September, which has added more than $400 billion to its balance sheet, is likely helping lift the stock market and other asset prices, not unlike its previous quantitative easing program, Dallas Fed president Robert Kaplan said Wednesday.

What he said: “My own view is it’s having some effect on risk assets,” Kaplan said in an interview with Bloomberg.

  • “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

Go deeper

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Eniola Odetunde/Axios

  1. Global: Total confirmed cases as of 6:30 a.m. ET: 30,199,007 — Total deaths: 946,490— Total recoveries: 20,544, 967Map
  2. U.S.: Total confirmed cases as of 6:30 a.m. ET: 6,675,593 — Total deaths: 197,644 — Total recoveries: 2,540,334 — Total tests: 90,710,730Map
  3. Politics: Former Pence aide says she plans to vote for Joe Biden, accusing Trump of costing lives in his coronavirus response.
  4. Health: Pew: 49% of Americans wouldn't get COVID-19 vaccine if available today Pandemic may cause cancer uptick The risks of moving too fast on a vaccine — COVID-19 racial disparities extend to health coverage losses.
  5. Business: Retail sales return to pre-coronavirus trend.
Mike Allen, author of AM
2 hours ago - Politics & Policy

Scoop: Mike Bloomberg's anti-chaos theory

CNN's Anderson Cooper questions Joe Biden last night at a drive-in town hall in Moosic, Pa., outside Scranton. Photo: CNN

Mike Bloomberg's $100 million Florida blitz begins today and will continue "wall to wall" in all 10 TV markets through Election Day, advisers tell me.

Why it matters: Bloomberg thinks that Joe Biden putting away Florida is the most feasible way to head off the national chaos we could have if the outcome of Trump v. Biden remained uncertain long after Election Day.

Biden's hardline Russia reset

Photo Illustration: Eniola Odetunde/Axios. Getty Images photos: Mark Reinstein

When he talks about Russia, Joe Biden has sounded like Ronald Reagan all summer, setting up a potential Day 1 confrontation with Russian President Vladimir Putin if Biden were to win.

Why it matters: Biden has promised a forceful response against Russia for both election interference and alleged bounty payments to target American troops in Afghanistan. But being tougher than President Trump could be the easy part. The risk is overdoing it and making diplomacy impossible.