According to Odaily Planet Daily, the Federal Reserve said that market participants and observers believe that higher-than-expected interest rates pose the greatest threat to financial stability in the context of persistent inflation. The Federal Reserve pointed out in its semi-annual financial stability report released on Friday that the risk most mentioned by market participants is that continued inflationary pressure may lead to a more restrictive monetary policy stance than expected. 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 since the last financial stability report was released in October, the banking industry has been performing robustly, and most banks continue to report capital levels far above regulatory requirements, but the Fed mentioned that existing data shows that hedge fund leverage has risen to historical highs, mainly due to the debt of the largest hedge funds.
