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Cook, Hammack highlight risks to financial stability from private credit, hedge funds

*Fed's next policy meeting is December 9-10, traders expect no rate cut

By Ann Saphir and Michael S. Derby

Nov 20 (Reuters) - Concerns about financial market stability, including the potential for a sharp drop in asset prices, are emerging as a fresh theme for Federal Reserve officials as they debate when and even whether to cut interest rates further.

But she called out a range of risks to the financial system, including fast-growing private credit markets, hedge fund trading in the Treasury securities market, and the adoption of generative artificial intelligence into machine-based trading.

Cook also suggested she would not be surprised by a collapse in historically elevated asset prices -

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