Federal Reserve Semi-annual Financial Stability Report: Continued inflation is seen as the number one financial risk

Odaily News The Federal Reserve said that in the context of persistent inflation, market participants and observers believe that higher-than-expected interest rates pose the greatest threat to financial stability. "The risk most cited by market participants is that persistent inflationary pressures could lead to a more restrictive monetary policy stance than expected," the central bank wrote in its semi-annual financial stability report released on Friday. The report includes a survey of financial market contacts and the central bank's assessment of risks in four main areas, including asset valuations, corporate and household borrowing, financial sector leverage, and funding risks. The Fed wrote in the report that the banking industry has performed robustly since the last financial stability report was released in October, and most banks continue to report capital levels far above regulatory requirements, but the Fed mentioned that existing data showed that hedge fund leverage has risen to historical highs, mainly due to the debt of the largest hedge funds. (Cailian News Agency)