Market volatility has not cut valuations: Fed report

The biannual monetary policy report was released Friday, ahead of Fed Chair Jerome Powell’s scheduled testimony in front of the House Financial Services Committee and Senate Banking Committee next Tuesday and Wednesday.

In the report, the Fed concluded that financial markets continued to function through the period of heightened volatility that followed the April 2 rollout of President Donald Trump’s sweeping tariff program, but not without a few hiccups.

Notably, liquidity in the Treasury market fell to its lowest level since the short-lived banking crisis of 2023. Markets for corporate bonds, municipal bonds and equities followed suit. Liquidity conditions have since improved, but have remained subject to swings based on subsequent news reports and policy developments — namely…