Fed warns high asset prices could make investors vulnerable

WASHINGTON (AP) — The Federal Reserve is warning that prices of stocks and other financial assets are rising to levels that could set investors up for big losses from sudden declines. A Fed report released Thursday noted that stocks and other risky assets have risen in value since last November, in some cases to record highs, as the outlook for the post-pandemic U.S. economy has improved with increases in vaccinations and business re-openings. The warning was included in the Fed’s twice-a-year “Financial Stability Report.” The central bank has been publishing the report since 2018 in an effort to highlight and address potential threats to the U.S. financial system. Its aim is to prevent a repeat of the 2008 financial crisis that pushed the U.S. and global economies into steep recessions.