KUALA LUMPUR (Nov 8): The US Federal Reserve (Fed) has listed US-China tensions, the Russia-Ukraine war, higher energy prices, rising inflation, the Covid-19 pandemic and cyberattacks as some of the most pressing financial risk concerns.
In its November Financial Stability Report, the central bank said geopolitical tensions, foreign divestments, Covid-19 and high energy prices were found to be some of the most-cited potential risks for the US economy, according to its survey.
The US Fed said that out of the 14 factors that pose a financial risk, crypto stands at the 11th position — revealing a change in investor mindset owing to the continued efforts of crypto entrepreneurs to educate the masses.
It said some of the pressing risk concerns raised by the respondents were related to the power struggle of global economies, which includes the US-China tensions, the Russia-Ukraine war, higher energy prices, rising inflation, the Covid-19 pandemic and cyberattacks, to name a few.
However, the US central bank maintained its anti-crypto position when it comes to evaluating the risks in crypto investment.
The US Fed said since the May 2022 Financial Stability Report, the economic outlook deteriorated amid growing downside risks and heightened uncertainty.
It said central banks around the world tightened monetary policy in response to persistently high inflation.
The bank said that against this backdrop, yields on long-term Treasury securities rose notably, which, along with diminished risk appetite, contributed to a decline in broad equity indexes and a widening of corporate credit spreads.
The valuation measures tracked for most corporate financial assets are now near or below their historical averages.