The risks to the US financial system have eased significantly compared to a year earlier, the Federal Reserve said Monday.
The central bank noted that as the economy recovers from the pandemic-driven recession, the balance sheets of individual Americans and businesses continue to strengthen.
However, the Fed did cite the significant rise in asset prices most notably home and stock prices as well as the rise of volatile trading of so-called meme stocks as potential risks to the financial system.
The observations came in the Fed’s semiannual Financial Stability Report on trends going on in both trading, investing as well as economic issues. The report is not an economic forecast, nor does it try to predict the next risk to the financial system. But it does attempt to highlight areas of concern to central bankers.
Overall the financial system is in better shape than it was a year ago and even six months ago, the Fed said. Borrowing by individual Americans and…