Bill Dudley, Columnist

Two Risks to Stability Are Building Amid Short-Term Calm

Low Treasury bond yields won’t last, and companies continue to pile on debt that could become junk in a bust.

November 20, 2019 at 6:00 AM EST

Bill Dudley, a Bloomberg Opinion columnist, served as president of the Federal Reserve Bank of New York from 2009 to 2018. He is the chair of the Bretton Woods Committee, and has been a nonexecutive director at Swiss bank UBS since 2019.

Don’t lose sight of the horizon.
Photographer: Drew Angerer/Getty Images

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The Federal Reserve, in its most recent semiannual report about risks to financial stability, concluded that there are no serious immediate threats. So does this mean we should relax? I definitely don’t think so. In my view, not only are two significant risks on the horizon, but both seem likely to be realized in the years ahead.

As for short-term risks, the Fed’s report, released on Friday, concluded in particular:

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