The Federal Reserve's latest Financial Stability Report highlights that prices remain elevated relative to economic fundamentals despite market turmoil in April. Liquidity in both Treasury and equity markets was low and deteriorated further during the month, although market functioning stayed orderly with Treasury markets continuing to see orderly trading amid volatility. The banking system is described as sound and resilient, with bank funding vulnerabilities aligning with historical norms. However, hedge fund leverage has reached historical highs, concentrated among the largest funds. The report also notes the growing stablecoin sector remains susceptible to run risks. Respondents to a Federal Reserve survey identified risks to global trade as the most frequently cited threat to the U.S. financial system, followed by concerns over fiscal debt sustainability and policy uncertainty. Additional potential shocks mentioned include foreign divestment from U.S. assets and fluctuations in the value of the U.S. dollar. The report indicates some signs of stabilization in commercial real estate prices and states that funding markets demonstrated resilience through early April's market volatility.