Key facts
- Asset valuations were elevated, with equity prices near the high end of their historical range.
- The equity premium remained well below average.
- Spreads on corporate bonds were low compared to their longer-term history.
- Home price increases slowed, but the ratio of house prices to rents remained near record highs.
- Hedge fund leverage has steadily increased across a broad range of strategies.
U.S. Federal Reserve Chair Kevin Warsh warned on Friday that the central bank must monitor risks to financial stability as the private sector increases investment in emerging technologies and companies. Warsh offered no signal on the October rate move, despite capital pouring into tech. The Federal Reserve's November 2025 Financial Stability Report noted that asset valuations were elevated, with equity prices near the high end of their historical range and the equity premium well below average. Spreads on corporate bonds were also low compared to their longer-term history. In U.S. property markets, home price increases slowed, but the ratio of house prices to rents continued to be near the highest levels on record. The report also highlighted that hedge fund leverage has steadily increased across a broad range of strategies.