Economy

Fed warns of possible ‘significant declines’ in stocks as valuations rise

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People walk past the U.S. Federal Reserve building in Washington D.C., the United States, May 21, 2020.

Ting Shen | Xinhua via Getty Images

Rising asset prices in the stock market and elsewhere are posing increasing threats to the financial system, the Federal Reserve warned in a report Thursday.

In its semiannual Financial Stability Report, the central bank said that while the system overall has remained largely stable even through the Covid-19 pandemic, future dangers are rising, in particular should the aggressive run on stocks tail off.

Investors have snapped up equities, corporate bonds and cryptocurrencies. They’ve poured billions into blank-check companies called SPACs, and the market…



Source cnbc.com

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