U.S. stocks and oil fell, the dollar weakened against the yen and Treasuries rallied as a Federal Reserve warning that low interest rates may cause “excessive risk-taking” drove investors to the relative safety of government debt.

The Standard & Poor’s 500 Index lost 0.1 percent to 1,105.65 at 4 p.m. in New York, erasing a gain spurred by the central bank’s lower forecast for unemployment. Crude futures fell 2 percent to $76.02 a barrel. The dollar slipped 0.5 percent to 88.54 yen. Treasuries rose, pushing the yield on five-year notes down to 2.09 percent, after an auction drew the most demand since 2007. Gold rose for the 16th time in 17 days.

Interest rates near zero may cause too much speculation in asset markets and spur inflation, Fed officials said in minutes from their Nov. 3-4 meeting released today. Financial officials in Japan and China, Asia’s two largest economies, said last week that the Fed’s interest-rate policy risks spurring speculative capital that may inflate asset prices and derail the global economic recovery.

(Bloomberg.com)