Small businesses in the United States are facing the twin challenges of tighter credit availability and the rising inability to pay back loans, the Federal Reserve said Friday.
While overall vulnerabilities from business and household debt remained 鈥榤oderate,鈥� some areas are in better shape than others, the US central bank said in its semi-annual financial stability report.
Delinquency rates, or the ability to repay loans, 鈥榬ose from the historically low levels reached in spring 2022 to above their pre-pandemic levels,鈥� the Fed said, while there was a deterioration in the quality of both short - and long-term credit availability.
Elsewhere, the Fed noted that valuation pressures 鈥榬emained elevated in a range of markets, including those for equity, corporate debt and residential real estate.鈥�
It also voiced concern about the dangers of so-called stablecoins 鈥� digital assets designed to hold their value relative to other assets 鈥� which have seen substantial growth since April.
The Fed also reiterated concerns about the impact of office vacancy rates on the commercial real estate sector.