Concern over ‘policy uncertainty’ risks grows, with distress over ‘geopolitical’ risks rising sharply, Fed survey shows

“Policy uncertainty” has risen as a “salient risk” to the financial system, at least in the eyes of those working in the financial services industry, according to results of a Federal Reserve survey released Nov. 7.

The survey was part of the agency’s quarterly “Financial Stability Report (FSR),” which summarizes the resilience of the U.S. financial system and present’s the agency’s current assessment of the system.

Results of the survey on salient risks to the financial system showed that 61% of respondents called “policy uncertainty” a threat to the system – the top risk cited. That’s up from the previous quarter, when 50% said the same thing (and when it was also the top risk cited).

The survey culled results, the Fed said, from 23 contacts, including professionals at broker-dealers, banks, investment funds, and advisory firms. “Respondents continued to highlight concerns about policy uncertainty, including trade policy, central bank independence, and the availability of economic data,” the Fed said.

Geopolitical risk was the second-highest risk noted by survey respondents, with 48% citing it (up from 23% last quarter). “Persistent inflation” and “higher long-term rates” were third, both at 43%. Inflation was the second-highest risk last quarter, at 41% – and rates were way up from last quarter, when 9% rated it of concern.

Also making big gains among risks was artificial intelligence, with 30% of respondents rating it high. Last quarter, only 9% said so.

In other areas of the FSR, the Fed reported:

• Although fair value losses on fixed-rate assets were still sizable for some banks, the banking system is “sound and resilient,” with historically high regulatory capital ratios.
• Most domestic banks maintained high levels of liquid assets and stable funding, with reliance on uninsured deposits remainin well below recent peaks.
• In commercial real estate, vacancy rates and rent growth appeared to be stabilizing, and transaction-based prices for commercial properties showed signs of stabilization.
• Auto and credit card loan delinquencies remained somewhat above their average levels over the past decade, changing little from the last quarter.

Financial Stability Report, November 2025