Federal Reserve Financial Stability Report: Global Trade Wars and Policy Uncertainty Are the Biggest Risks to Financial Stability
The latest financial stability report released by the Federal Reserve on Friday shows that rising global trade risks, overall policy uncertainty, and the sustainability of U.S. debt top the list of potential risks to the U.S. financial system. This is the first time since Trump returned to the White House that the Fed has conducted a semi-annual survey on financial risks. 73% of respondents indicated that global trade risks are their biggest concern, more than double the proportion reported in November. Half of the respondents believe that overall policy uncertainty is the most worrying issue, up from the same period last year. The survey also found that issues related to recent market turmoil have garnered more attention, with 27% of respondents worried about the functioning of the U.S. Treasury market, up from 17% last fall. Concerns about foreign divestment from U.S. assets and the value of the dollar have also risen on the list of concerns.
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