Late Monday, Reuters came out with the details of the US Federal Reserve’s biannual Financial Stability Report. The report warns American business houses while saying that the US may still face a wave of debt defaults and “significant declines” in asset prices because of the coronavirus (COVID-19) pandemic and recession.
The Fed report also mentioned, per Reuters, that the asset prices remain vulnerable to significant declines should investor risk sentiment fall or the economic recovery weaken.
While the news fails to offer any fresh insights than what already suggested in May, it said, “In the near term, risks associated with the course of COVID-19 and its effects on the U.S. and global economies remain high.”
FX implications
The news could be cited as the day-end spoiler for the Wall Street benchmarks that earlier refreshed record highs. Though, vaccine hopes and Joe Biden’s victory in the US elections seem bigger news to cheer recently.
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