Fed survey finds global trade fight, policy uncertainty top financial stability risks

Pete Schroeder and Michael S. Derby

Fri, Apr 25, 2025, 1:06 PM 2 min read

By Pete Schroeder and Michael S. Derby

WASHINGTON (Reuters) -Rising risks astir planetary trade, wide argumentation uncertainty, and the sustainability of U.S. indebtedness topped the database of imaginable risks to the U.S. fiscal strategy successful a caller Federal Reserve survey released connected Friday.

The bi-annual Fed survey of fiscal risks was the archetypal since President Donald Trump returned to office, and the interaction of his assertive argumentation docket was apparent, particularly astir tariffs. Seventy-three percent of respondents cited planetary commercialized risks arsenic a apical concern, much than doubly the fig reported successful November. Half cited argumentation uncertainty successful wide arsenic a apical concern, up arsenic good from the fall.

"Concern implicit changes to commercialized argumentation was the top-cited hazard this cycle. While galore respondents viewed tariffs arsenic the cardinal risk, immoderate noted that the home system could upwind incremental tariffs connected imported goods with lone humble disruption," the study stated, adding, "Respondents considered that the imaginable for an escalatory commercialized warfare could person much terrible consequences."

Respondents cited "changes successful authorities spending priorities and the grade of U.S. planetary engagement" arsenic driving uncertainty.

The latest survey besides recovered much attraction focused connected issues related to caller marketplace turmoil, with 27% of contacts disquieted astir functioning Treasury markets, up from 17% successful the fall. Foreign divestment of U.S. assets and the worth of the dollar besides roseate connected the database of concerns.

The Fed said the "vast majority" of the 22 survey respondents, who see academics, investors and concern professionals, submitted their answers earlier April 2, the time Trump announced a sweeping acceptable of tariffs connected countries astir the world. A week later, Trump enactment the astir punishing levies connected clasp for 90 days arsenic the medication looks to negociate caller commercialized deals.

The heightened argumentation uncertainty that has pushed up marketplace volatility since Trump returned to the White House was partially offset by the Fed uncovering comparative stableness successful a scope of different areas.

For example, the U.S. cardinal slope said commercialized existent property prices, a long-running interest pursuing the COVID-19 pandemic, showed signs of stabilizing. And portion markets were strained successful aboriginal April arsenic liquidity was debased successful some stocks and Treasury bonds, the Fed said some markets remained orderly.

However, the Fed cautioned that adjacent pursuing the April selloff, plus valuations remained comparatively high, and residential existent property prices besides were elevated.

The Fed said the U.S. banking strategy remained dependable and resilient, arsenic firms maintained robust superior ratios. But it did find that slope recognition commitments to little regulated non-banks continued to increase.