Fed Report: Financial System Sound, Asset Values Above Historic Norms

The Federal Reserve's Financial Stability Report concluded that the U.S. financial system remains 'sound and resilient,' with overall vulnerabilities unchanged from the previous assessment.

Bank reserves continue to be in the 'ample' range, supported by reserve management purchases. However, the report notes that valuations in several asset classes—including equities, corporate bonds, and residential real estate—are elevated relative to historical norms.