Real Estate Valuations Top Fed Report on Stability

The Fed's financial stability report highlights concerns in the banking system, particularly elevated real estate valuations. However, the Fed is not overly worried, citing high levels of capital and moderate interest rate risk exposures as reasons for banking resilience. Household debt to GDP is modest, while business debt is elevated but slowing. Market participants are concerned about inflation, banking sector stress, and US-China tensions. The report notes that Russia's war on Ukraine is less of a concern compared to previous reports.

What does the Fed say about the resilience of banks to potential strains from higher interest rates?

What was the only concern that eased slightly in the last report?