Federal Reserve Alert! Fed releases Financial Stability Report, their framework for assessing the resilience of the U.S. financial system and presents the Boardโs current assessment.
They see as vulnerabilities: Asset valuations, Borrowing by business and households, Leverage, and Funding Risks.
Source: https://www.federalreserve.gov/publications/files/financial-stability-report-20221104.pdf
Against this backdrop, our view of the current level of vulnerabilities is as follows:
1. Asset valuations. Higher interest rates and a weaker outlook for the