FED’S COOK WARNS OF POSSIBLE MARKET DROP

Fed Governor Lisa Cook warned that high valuations in stocks, corporate bonds, housing, and leveraged loans increase the risk of sharp market declines, though she said the financial system remains resilient.

She highlighted liquidity risks tied to hedge funds’ growing role in Treasury markets and said private credit isn’t a stability threat but should be monitored. Cook added that AI could both improve and destabilize markets, noting that its impact requires close watch. She did not discuss monetary policy.

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