The Fed Vice Chair sees the US economy in good shape.
(Photo: Reuters)
new York According to the US Federal Reserve (Fed), the financial system has held up well so far this year despite high interest rates and the war in Ukraine. American households, financial institutions and companies have coped with it, said Fed Vice Chair Lael Brainard on Friday after the publication of the Fed’s semi-annual financial stability report.
Household and corporate debt has remained relatively stable. Despite the high interest rates, most of them managed to service their debts. The economy adjusts to the rate hikes. Banks continued to have adequate capital. Real estate prices also held up for the most part. Liquidity on the bond markets has deteriorated. Overall, however, things have been going well on the bond markets in recent months.
However, the weakening economic conditions abroad due to the Ukraine war, the ongoing zero-Covid policy and the problematic real estate market in China as well as high inflation could also have an impact on the economy or the financial system in the US under certain circumstances, the Fed warned. Report.
During the long period of low and stable interest rates, some financial institutions have increased their leverage and use of derivatives. With interest rates now rising, however, they ran the risk of coming under pressure. Modern financial markets are interconnected, so negative influence from abroad could hurt US markets as well.
Top jobs of the day
Find the best jobs now and
be notified by email.
More: US employment rises faster than expected