Federal Reserve Financial Stability Report: Political uncertainty and geopolitical risks are the most prominent stability concerns.

The Federal Reserve stated that the latest survey results indicate that the most mentioned risks to financial stability in the United States are policy uncertainty, trade policies, central bank independence, and the availability of economic data. Respondents listed artificial intelligence as one of the top stability concerns. Respondents also mentioned geopolitical risks, inflation, monetary tightening, and higher long-term interest rates as major significant risks. Respondents stated that if the current widespread optimism about AI changes, it could lead to a correction in risk assets; if the correction is significant, it could also slow down the labor market and tighten financial conditions.