Fed Warns of "High Possibility of Major Stock Market Decline" (Update)

Publication of Semiannual Financial Stability Report
"Asset Prices Rising, Possibility of Stock Market Decline"
Concerns Over Market Volatility Due to Hedge Funds and Others

Traders are at work on the floor of the New York Stock Exchange in the United States.
[Image source=Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The United States Federal Reserve (Fed) has warned that while the current financial market is relatively stable, the stock market could experience a significant decline.

The Fed expressed this concern in its semiannual financial stability report released on the 6th (local time).

According to CNBC, the Fed judged that the financial system is generally maintaining stability, but there is a possibility of a decline in the stock market.

The report stated, "Although asset prices have risen due to low U.S. Treasury yields, some assets are priced above historical levels," and expressed concern that "if investment appetite decreases, asset prices could fall sharply."

The report repeatedly emphasized that hedge funds and non-bank financial institutions are potential risk factors for the financial system, citing the recent case of Archegos Capital, which caused significant market turmoil.