Federal Reserve Governor Lisa Cook said on Monday that expectations for short-term policy rates do not appear to be driving the rise in long-term rates, according to Reuters.
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“Residential and commercial real estate prices remain above levels historically associated with fundamentals.”
“If commercial mortgage default rates force sales, commercial real estate prices could fall sharply.”
“Corporate borrowing is at high levels, but measures of debt service capacity remain strong overall due to earnings and the limited impact of high interest rates so far.”
“For some borrowers, debt service capacity has begun to show signs of weakness.”
“In terms of debt, the household sector appears quite resilient, although signs of stress are emerging for those with weak credit.”
“Banking sectors remain generally strong and resilient, acute stresses have subsided.”
“Vulnerabilities among non-banks could amplify tensions arising from tightening financial conditions and a slowing economy.”
“The Fed cannot foresee all risks, but it can strengthen resilience to shocks; it is especially important to strengthen the resilience of large banks.”
Market reaction
These comments did not provoke a notable reaction in the markets. At the time of writing, the Dollar Index was virtually unchanged at 105.05.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
