Fed's Financial Stability Report highlights key risks

Asset valuation pressures, borrowing by businesses and households, financial-sector leverage, and funding risks are the primary vulnerabilities in the U.S. financial system, according to the Federal Reserve’s semiannual Financial Stability Report.

Details: The report also noted near-term risks to the financial system such as policy uncertainty, geopolitical risks, higher long-term rates, persistent inflation, and a sharp decline in asset prices, potentially connected to a turn in artificial intelligence sentiment.