Fed Minutes Reveal U.S. Financial System Remains Significantly Fragile

According to ChainCatcher, citing Jintou, the Federal Reserve released the minutes of its July meeting, indicating that the stability of the U.S. financial system is still described as "significantly" fragile. Staff assessments show that asset valuation pressures remain high, stock market price-to-earnings ratios are at historical highs, and high-yield corporate bond spreads have narrowed significantly. Although the household debt-to-GDP ratio is at its lowest level in the past 20 years and household balance sheets remain robust, private sector debt is growing rapidly and interest coverage ratios have fallen to historic lows, suggesting that vulnerabilities in this sector may be intensifying.