2025 Annual Report to Congress

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires the OFR to analyze threats to the financial stability of the United States each year and provide Congress with its key findings. The 2025 Annual Report to Congress provides an analysis of risks to financial stability in the United States and key findings from the OFR’s applied research and analysis. It also details the OFR's organizational efforts in meeting its missions of supporting the financial stability work of the Council and achieving organizational excellence.

This year’s report shares applied research in several areas: technology and cyber risks, business and household credit risk, financial institutions, asset markets, and money markets.

Download Full Report Executive Summary Status of the OFR Press Release

Introductory Letter

James Martin

It is my pleasure to deliver the Office of Financial Research’s 2025 Annual Report to Congress in accordance with Section 154(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The information covered describes our work during the fiscal year, between October 1, 2024, and September 30, 2025.

FY 2025 was a year of significant change for the OFR. Alongside a decline in workforce size, we sharpened our focus to core mission activities and reduced our budget to align with the Administration’s goals. We also successfully leveraged recent Artificial Intelligence advances to improve organizational efficiency.

Read the full letter

Report Highlights

Technology and Cyber Risks

  • The financial system makes heavy use of technology and remains vulnerable to operational failures and cyberattacks. The industry and regulators are working to limit the risks.
  • Cyber events can spread through both financial and information networks, whereas operational disruptions spread through financial networks.
  • Third-party service providers are a locus of vulnerability, in part because operational or cyber issues can be spread to, from, and across customers.

Businesses and Households

  • Interest rate spreads on corporate debt remain very low, implying unusual optimism on the part of investors.
  • Conditions in commercial real estate markets are stabilizing, making contagion from large losses less likely.
  • Outstanding balances and delinquency rates on debt owed by subprime households are higher than before the COVID-19 pandemic.

Financial Institutions

  • Concerns about unrealized losses in bank security portfolios have faded.
  • The risk of credit losses remains high on mortgages on many large office buildings in large cities, but exposure to such losses is mostly at large banks and such exposures are a small fraction of their total assets.
  • Hedge fund borrowing and leverage has risen rapidly, especially at hedge funds following macro and relative value strategies.

Asset Markets

  • U.S. Treasury security markets functioned well during a period of heightened volatility in April.
  • Price-to-earnings ratios in U.S. equity markets are high relative to historical averages, implying substantial investor optimism.
  • Market liquidity provided by proprietary trading firms remained robust during the period of higher volatility in April.

Money Markets

  • The OFR began collecting data on non-centrally cleared bilateral repo in December of 2024, improving regulators’ understanding of repo markets, which are large.
  • The size of institutional prime money market fund balances, which historically have been particularly prone to runs, decreased.
  • The majority of commercial paper continues to be issued by financial firms and asset-backed structures, not by nonfinancial firms.