This report reviews vulnerabilities affecting the stability of the U.S. financial system related to valuation pressures, borrowing by businesses and households, financial-sector leverage, and funding risks. It also highlights several near-term risks that, if realized, could interact with these vulnerabilities. A summary of the developments in the four broad categories of vulnerabilities since the October 2023 Financial Stability Report is as follows: Asset valuations. Valuations rose further to levels that were high relative to fundamentals across major asset classes. Equity prices grew faster than expected earnings, ... (full story)