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Fed report warns of large market plunge if risks accelerate

Published 11/28/2018, 10:25 AM
Updated 11/28/2018, 10:25 AM
© Reuters.  Fed report warns of large market plunge if risks accelerate
  • The Federal Reserve warns that asset valuations appear high vs. historical ranges and that could lead to market plunges if risks increase, according to its financial stability report.
  • Some key takeaways from the report:
  • Commercial real estate prices have grown faster than rents for several years, the report says; farmland prices are near historical highs.
  • Measures of house prices relative to household income suggest elevated pressures in residential real estate nationwide.
  • Vulnerabilities from total private-sector credit appears "moderate."
  • Household borrowing has advanced more slowly than economic activity and is mostly concentrated among low-credit-risk borrowers.
  • Debt issued by businesses is historically high, with a pick-up in risky debt and credit standards for some business loans seems to have declined.
  • Leverage in financial sector has been low in recent years.
  • The Fed sees near-term risks from Brexit and eurozone fiscal challenges as well as problems in China and other emerging markets.
  • ETFs: VNQ, MORL, IYR, REM, RQI, MORT, SCHH, RNP, DMO, RFI, KBWY, DRN, NRO, URE, ICF, XLRE, JRS, RWR, SRS, FREL, DRA, TSI, DRV, RIF, PGZ, JLS, LRET, CMBS, REK, RIT, FRI, FMY, FTY, PSR, JMT, LMBS, USRT, WREI, MBSD, IARAX, RORE, BBRE, PPTY
  • Now read: Weekly Review: Real Estate CEFs - Cohen & Steers REIT And Preferred Income Fund With -1.5 Z-Score


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