MADRID — It is a valid question not only for the U.S. Federal Reserve whether policies could be sowing the seeds of a future crisis, Atlanta Federal Reserve Bank President Dennis Lockhart said Tuesday.

Taking questions following a speech, Lockhart said the Fed and to some extent the European Central Bank are faced with the need to determine whether policy is "generating the next crisis by feeding a bubble of some kind."

"We're watching this very carefully," he said. "We do not see any indication of asset classes that are in bubble territory."

Lockhart said the Fed's policy rate is "as low as it can go."

If American businesses are not borrowing, it is to some extent because they "don't want to or don't feel comfortable" doing so, he said.

Asked about the euro, Lockhart said merely "we have a definite interest in a strong Eurozone. I'm not going to touch the question of the exchange rate. Markets will" determine that.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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