Federal Reserve Warns of Risks in Traditional Assets While Crypto Market Sees Relief

The Federal Reserve’s latest Financial Stability Report strikes a cautious tone on traditional investments, labeling stocks and real estate as ’risky’ amid elevated valuations. Equity prices remain historically high relative to earnings forecasts, while Treasury yields hover NEAR post-2008 crisis levels.

Market leverage and funding risks emerge as key concerns in the report, which covers conditions through April 11. The warning comes just days after the central bank appeared to soften its stance on digital assets—a subtle but noteworthy shift for crypto markets.

While the document doesn’t explicitly mention cryptocurrencies, its cautious outlook on conventional markets may drive capital toward alternative assets. The timing is particularly significant given recent crypto market rebounds following regulatory clarity from other agencies.