Economist Ed Yardeni sees "bubble-like conditions" forming in the bond market, especially given the signals thrown off by Federal Reserve Chairman nominee Janet Yellen.

In her Senate testimony last week, Yellen said she sees no risk to financial stability from the central bank's huge ongoing quantitative easing (QE) campaign, although she conceded there have been "limited signs of a reach for yield" among investors.

Her words could be a damaging understatement, according to Yardeni, president and chief investment strategist at Yardeni Research.

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"I see more bubble-like conditions than Janet Yellen does. Her lack of concern may be justified currently, but by expressing it she increases the odds of triggering melt-ups in asset markets, especially if she turns out to be even more dovish than [current Fed Chair Ben] Bernanke, as I expect," he wrote on his blog.

Yardeni noted that yield-starved investors helped emerging markets reach debt sales of $439 billion through October – not far from the all-time annual record of $488 billion with two months to go in 2013, and likely to eclipse that annual record, according to the Financial Times.

"Tapering chatter during the summer nearly burst the bubble in emerging market debt. Since the 9/18 decision not to taper, more air has been pumped into it," Yardeni said.

Meanwhile, Fed data show the outstanding amount of corporate bonds issued by nonfinancial corporations hit a record $6.1 trillion at the end of the second quarter.

"That's a bubble-like development if stock prices are getting a significant lift from debt-financed share buybacks rather than actual earnings growth," Yardeni concluded.

Low U.S. inflation, currently at about 1.9 percent, could encourage the Fed to continue to delay tapering its $85 billion monthly purchases of government bonds. Global inflation is at its lowest level in years, The New York Times reported.

The Financial Times reported investors have been using yield-bearing stocks and junk bonds as a substitute for government bonds, since government debt yields have fallen to near-zero levels.

The FTSE USA index has risen back up to where it stood at the peak of the market in October 2007, the Financial Times reported.

"If there is a Fed-induced bubble today, it is because profits are temporarily running at elevated levels. Measured on median price to book or median price to sales, U.S. shares look expensive," the Financial Times stated.

Sean Fieler, chairman of the American Principles Project, wrote in an opinion piece in USA Today that QE has been a gaping disaster for most Americans.

"While the Fed's easy-money policies have not produced many jobs, they have produced a persistent, low rate of inflation that is choking the American middle class," Fieler wrote.

"Worst of all for those focused on limiting the size of government, Yellen's easy-money policies are encouraging Washington's continued fiscal irresponsibility."

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