1 of the greatest near-term risks to financial stability: Public health

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The Federal Reserve said one of the greatest near-term risks to the U.S. financial system is the potential for worsening public health amid the COVID-19 pandemic, according to The Wall Street Journal.

Another resurgence of COVID-19 cases could slow the recent economic recovery, the central bank said in its Financial Stability Report. The Federal Reserve added that the worsening public health threat would be especially risky if far-reaching business closures return or supply chains are further disrupted. 

Although COVID-19 cases have waned in recent months, the resurgence tied to the delta variant coincided with a slowdown in hiring and economic growth, according to the report.  

"Asset prices may be vulnerable to significant declines should risk appetite fall, progress on containing the virus disappoint, or the recovery stall," the Federal Reserve said, according to the Journal

Read the full report here

 

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