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Fed’s Stability Assessment: In the Federal Reserve’s latest assessment of financial stability, concerns over persistent inflation and the potential impacts of the upcoming 2024 US presidential election have been highlighted as key risks. According to the semi-annual survey conducted by the Fed, market participants and other contacts expressed worries about inflationary pressures and the likelihood of prolonged higher interest rates.
Geopolitical tensions, particularly in regions such as the Middle East and Ukraine, also contributed to uncertainties, alongside the political landscape in the United States.
Limited financial risks
The survey, released as part of the Fed’s Financial Stability Report, indicates ongoing monitoring of various economic indicators to identify potential areas of concern. Despite the Fed’s previous efforts to combat inflation through aggressive interest rate hikes, the report suggests limited evidence of widespread risks to the financial system, although borrowing costs remain elevated.
While concerns persist regarding the need for an economic slowdown to curb inflation, the report highlights the resilience of household and business…
