Fed Report Highlights Hedge Fund Leverage Near 2013 Highs, $170 Billion Stablecoin Assets Amid August Sell-Off

A recent Federal Reserve report highlights notable vulnerabilities in the financial sector, particularly regarding hedge fund leverage, which is at or near its highest level since 2013. The report indicates that leveraged hedge funds significantly contributed to the market sell-off in August. Additionally, liquidity conditions in the Treasury cash market are described as challenged, potentially amplifying future market shocks. The report also notes that stablecoin assets have risen to nearly a record $170 billion as of early November, indicating their rapid scalability while remaining susceptible to runs.