Fed report cites inflation, US election as key financial stability risks

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The Federal Reserve's latest survey of U.S. central bank contacts identifies persistent inflation and higher-for-longer interest rates as key risks to financial stability. Geopolitical troubles and the 2024 U.S. presidential election are also mentioned as potential sources of shocks. The survey results were included in the Fed's Financial Stability Report, which examines leverage and risk-taking in the economy. The report shows little evidence of widespread risks to the financial system, despite borrowing costs remaining high. However, concerns about policy uncertainty related to trade policy, foreign policy issues, and the U.S. elections were noted. The banking system is described as sound and resilient, with strong capital and liquidity levels. Some areas of concern include declining values for commercial real estate and rising leverage among larger hedge funds.

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https://finance.yahoo.com/news/fed-report-cites-inflation-us-200429677.html