Federal Reserve publishes its inaugural flagship financial stability report.

Peter Prince

2018-12-05 09:38:00 Wed ET

Federal Reserve publishes its inaugural flagship financial stability report. Fed Chair Jerome Powell applauds both low inflation (2%) and low unemployment (3.7%) as evidence of a robust U.S. economic outlook. Federal Reserve aims to continue the gradual interest rate hike to help the U.S. economy operate near full employment as the inflation rate rises above the symmetric 2% target threshold. The first-ever financial stability report warns of the economic dangers that lurk in corporate debt. Investors exhibit a high tolerance for risks in business debt as the corporate-debt-to-GDP ratio hits the historically high ratio of 0.45 with some signs of deterioration in credit standards. The same financial stability report finds less worrisome aspects in the U.S. financial system. Low household leverage better aligns with aggregate income, and the systemically-important financial institutions (SIFIs) carry higher equity capital buffers with liquid assets. Moreover, SIFIs have passed the Federal Reserve annual macro stress tests as of mid-2018.

Also, broker-dealer leverage is below the pre-crisis levels; insurers face favorable solvency positions; and money-market funds become less vulnerable to bank runs. Overall, the U.S. financial system seems sound and efficient, but high corporate leverage may crowd out public debt accumulation. The Trump administration thus needs a fair bit of fiscal discipline and prudence.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Warren Buffett places his $58 billion stock bets on Apple, American Express, and Goldman Sachs.

Rose Prince

2019-04-05 08:25:00 Friday ET

Warren Buffett places his $58 billion stock bets on Apple, American Express, and Goldman Sachs.

Warren Buffett places his $58 billion stock bets on Apple, American Express, and Goldman Sachs. Berkshire Hathaway owns $18 billion equity stakes in America

+See More

Thomas Piketty empirically shows that the top 1% cohort rakes in 20%+ of U.S. national income.

Daisy Harvey

2018-09-01 07:34:00 Saturday ET

Thomas Piketty empirically shows that the top 1% cohort rakes in 20%+ of U.S. national income.

As the French economist who studies global economic inequality in his recent book *Capital in the New Century*, Thomas Piketty co-authors with John Bates Cl

+See More

Eric Posner and Glen Weyl propose radical reforms to resolve key market design problems for better democracy and globalization.

Chanel Holden

2023-02-14 09:31:00 Tuesday ET

Eric Posner and Glen Weyl propose radical reforms to resolve key market design problems for better democracy and globalization.

Eric Posner and Glen Weyl propose radical reforms to resolve key market design problems for better democracy and globalization. Eric Posner and Glen Weyl

+See More

A brief biography of Andy Yeh

Andy Yeh Alpha

2023-06-19 10:31:00 Monday ET

A brief biography of Andy Yeh

A brief biography of Andy Yeh Andy Yeh is responsible for ensuring maximum sustainable member growth within the Andy Yeh Alpha (AYA) fintech network plat

+See More

Scientific research trumps basic intuition and common sense.

Amy Hamilton

2019-08-30 11:35:00 Friday ET

Scientific research trumps basic intuition and common sense.

The conventional wisdom suggests that chameleons change their skin coloration to camouflage their presence for survival through Darwinian biological evoluti

+See More

White House chief economic adviser Larry Kudlow points out that the recent U.S. dollar strength shows a clear sign of investor optimism.

James Campbell

2018-08-13 12:39:00 Monday ET

White House chief economic adviser Larry Kudlow points out that the recent U.S. dollar strength shows a clear sign of investor optimism.

White House chief economic adviser Larry Kudlow points out that the recent U.S. dollar strength shows a clear sign of investor confidence and optimism. Gree

+See More