The latest Fed report reveals key risks to the financial system of the United States, focusing on trade tensions and political uncertainty.
Trade Tensions as Major Risk
According to the Fed's latest report, 73% of survey respondents identified global trade risks as their primary concern, more than doubling previous figures. This highlights growing anxiety regarding international trade.
Political Uncertainty and Its Impact
Political uncertainty is also a significant concern. Half of respondents cited uncertain or changing economic policies as their main worry, reflecting market participants' reactions to potential regulatory and fiscal changes under the new administration.
Market Volatility and Foreign Investor Withdrawals
The report additionally highlights concerns about recent market volatility. 27% of respondents expressed worries about the functioning of the U.S. Treasury market. Furthermore, there is growing concern regarding foreign investor withdrawal from U.S. assets and its potential impact on the dollar.
Responses to these risks could significantly influence financial stability in both the U.S. and on a global scale.
