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Fed Warns of Peril in Run-Up of Risky Asset Prices, Stablecoins

  • In report, Fed also flags concerns tied to Chinese real estate
  • Central bank cautions stablecoins are susceptible to ‘runs’
The Marriner S. Eccles Federal Reserve building in Washington.
Photographer: Stefani Reynolds/Bloomberg
Updated on

The Federal Reserve is warning that prices of risky assets keep rising, making them more susceptible to perilous plunges if the economy takes a turn for the worse, and cited stablecoins as an emerging threat.   

“Asset prices remain vulnerable to significant declines should investor risk sentiment deteriorate, progress on containing the virus disappoint, or the economic recovery stall,” the Fed said in its twice-yearly Financial Stability Report released Monday.