George said one of the largest risks is that the European debt crisis may spread to the U.S. through the financial system.
"When I think about risks to our economy, in terms of whether Europe goes into a recession, and some have said they may be there now, I worry more about things like financial contagion that could come across," George said. "You see a lack of confidence. You see characteristics that we saw back in 2008."
Processing Checks
The Kansas City Fed is one of the 12 regional banks that aid in supervising commercial banks and processing checks as well as reporting on regional business conditions. The Kansas City district represents Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico and the western third of Missouri.
George said that one area where risk may be mispriced is farm land, also a concern of her predecessor Hoenig in his final year as Kansas City Fed chief.
"Each week brings a new tale of dizzying prices at the most recent farmland auction," she said. "I hear from many well-informed, concerned voices across our region wondering whether this could be a bubble.'
"These types of events have played out in the past, and the results were not kind to the industry involved or its banks," said George, 53. "There may be other sectors experiencing similar conditions that will not be obvious without the benefit of hindsight. This is a common pattern with mispriced risk."
Boost Economy
Some officials on the Federal Open Market Committee have continued to call for efforts to boost the economy and particularly the dormant housing market.
New York Fed President William C. Dudley said last week that "additional housing policy interventions" can help boost growth, and the Fed should consider further easing. Boston Fed President Eric Rosengren said he supported the purchase of mortgage-backed securities.