Stocks Slammed After Fed Williams Warns "Market Rally Running On Fumes"

While the old saying is "they don"t ring a bell at the top," we suspect Fed vice-chair Stanley Fischer just came as close as one can without screaming "sell."

It"s getting clearer that Fed officials are getting concerned about where asset markets are going.

• *FISCHER: "NOTABLE UPTICK IN RISK APPETITES" IN ASSET MARKETS


• *FISCHER: EQUITY P/E RATIOS ARE NEAR TOP OF HISTORICAL LEVELS

• *FISCHER: HIGH ASSET PRICES MAY LEAD TO FUTURE STABILITY RISKS


• *FED"S FISCHER SAYS CORPORATE SECTOR "NOTABLY LEVERAGED"

Don"t fight The Fed...

• *FISCHER SAYS IT WOULD BE FOOLISH TO THINK ALL RISKS ELIMINATED


• *FISCHER CALLS FOR "CLOSE MONITORING" OF RISING RISK APPETITES

Federal Reserve Bank of San Francisco President John Williams just said in an interview on Australian TV that "there seems to be a priced-to-perfection attitude out there” and that the stock market rally "still seems to be running very much on fumes."

“We are seeing some reach for yield, and some, maybe, excess risk-taking in the financial system with very low rates. As we move interest rates back to more-normal, I think that that will, people will pull back on that," Williams says Tuesday in Australian Broadcasting Corporation television interview.

“I am somewhat concerned about the complacency in the market. If you look at these measures of uncertainty, like the VIX measure, or other indicators, there seems to be a priced-to-perfection attitude out there”

“The stock market still seems to be running very much on fumes, or is very strong in terms of that, so something that clearly is a risk to the U.S. economy, some correction there, is something that we have to be prepared for, and to respond to, if it does happen”

“The U.S. economy still is doing -- I think on fundamentals -- is doing quite well. So I’m not worried about some kind of late-’90s, dot-com bubble economy where a lot of the underpinnings were driven by the stock market”

The question is - will Janet Yellen play dovish good cop to Fischer"s and Williams"fear-mongery? Or is The Fed"s new policy designed to crack markets?