Today, another round of interest rate cuts appears almost certain—but some economists worry the Fed's move could backfire by inflating market bubbles.

In an interview, Joe Brusuelas, chief economist at RSM, expressed "real reservations" about the possibility that Fed policy might "exacerbate asset bubbles by encouraging more leverage and risk-taking behavior."

Typically, rate cuts incentivize investors to take on greater risks.

Brusuelas warned that due to the outsized exposure of high-income Americans to equities, a bubble burst could inflict "collateral damage" on the real economy.

"This could bring the business cycle to an end," Brusuelas noted—in other words, a bubble collapse might trigger a recession.

In September, Fed Chair Jerome Powell was asked whether rate cuts could fuel bubbles. At the time, Powell stated that Fed officials were monitoring financial stability "very carefully," describing risks as a "mixed picture" with structural vulnerabilities "not elevated."

Some observers have already flagged bubble risks in artificial intelligence, citing overvaluation and recent instances of circular financing. On Wednesday, Nvidia—a leading AI chipmaker—saw its market cap surpass $5 trillion.

While certain investor behaviors may resemble "prior bubble periods," Goldman Sachs noted that current valuations haven't reached the extreme levels seen in past bubbles.

"We still face risks of eventually slipping into a bubble, but broadly speaking, we don't believe we're in one yet," Goldman strategists wrote in a recent report.