The US Federal Reserve members have pointed out to rising risks in financial stability, according to minutes released Wednesday on the central bank’s last meeting.
“Various participants commented on the prolonged period of low interest rates and highly accommodative financial market conditions,” The Federal Open Market Committee (FOMC) said in the minutes.
The FOMC members also commented on “the possibility for these conditions to lead to reach-for-yield behavior that could raise financial stability risks.”
Financial markets across the US, Europe and cryptocurrencies have been witnessing high volatility and steep declines in recent weeks despite the Fed kept its benchmark interest rate near-zero level after the conclusion of its two-day meeting on April 27–28.
VIX volatility index, also known as fear index, was at 23.30 level with a 9.2% increase at 1420 EDT (1820), 20 minutes after the minutes were released.
Major indexes on the US stock market have continued their decline for the fourth consecutive day with the Dow and the S&P500 down more than 0.4% each and the Nasdaq shedding 0.2%.
Although the Fed has repetitively made clear that it would not raise its benchmark interest rate until 2023, rising inflation has become a concern for most investors.
Consumer price index in the US, which the Fed considers as the foremost inflation indicator, rose 4.2% in April to mark its sharpest increase since September 2008.
Source: Anadolu Agency