Fed survey finds new fear on Wall Street: Foreign divestment of U.S. assets

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Fed survey finds new fear on Wall Street: Foreign divestment of U.S. assets
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41% of participants cited concern of foreign disinvestment, according to a recent New York Fed’s survey.

Wall Street professionals have become worried about foreign divestment of U.S. assets, according to a Federal Reserve report on financial market stability released Monday.

Also making the list for the first time was the Russian invasion of Ukraine. More than 75% of participants mentioned that concern. “The Federal Reserve is working with domestic and international regulators to better understand the exposures of commodity-market participants and their linkages with the core financial system,” said Fed Vice Chairman Lael Brainard, in a statement.

“Low market liquidity likely contributed to large fluctuations in prices of financial assets, but markets functioned well overall,” the Fed said.According to some measures, market liquidity has declined since late 2021 for recently issued U.S. cash Treasury securities and equity index futures. These markets play a key role in the functioning of the economy and financial system, and are usually heavily liquid, the Fed said.

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