Fed Report Lists Financial System Vulnerabilities

The transcript discusses the Federal Reserve's economic outlook, highlighting concerns about leveraged loans and investor risk tolerance. It explains the concept of the countercyclical capital buffer, a tool for banks to cushion losses during downturns. The Fed is worried about high investor risk tolerance and the lack of safeguards in the market. The discussion also touches on the Fed's dual mandates of full employment and price stability, emphasizing the potential impact of high corporate debt on these goals.

What does the Fed mean by 'high tolerance for risk' in the context of investor behavior?

In what ways could an economic slump affect businesses and employment?