Washington, Nov 10 (IANS) The US Federal Reserve has warned of a potential decline in asset prices and other financial risks as the raging Covid-19 pandemic and recession still persisted in the coountry.

"Given the high level of uncertainty associated with the pandemic, assessing valuation pressures is particularly challenging, and asset prices remain vulnerable to significant declines should investor risk sentiment fall or the economic recovery weaken," the Fed said in its latest biannual Financial Stability Report released on Monday.

"Business and household earnings have fallen and business borrowing has risen, which leave households and firms more vulnerable to future shocks," Xinhua news agency quoted the report as saying and added that loan defaults might rise, leading to material losses for lenders.

The report also noted that the Covid-19 shock highlighted how vulnerabilities related to leverage and funding risk at non-bank financial institutions could amplify shocks in the financial system in times of stress.

"The resurgence of fragility and funding stress in the same non-bank financial sectors in the Covid-19 crisis and the Global Financial Crisis highlights the importance of a renewed commitment to financial reform," Lael Brainard, a member of the Fed's Board of Governors, said in a statement on Monday.

The report came as the United States on Monday confirmed more than 10 million Covid-19 cases, just 10 days after hitting 9 million, according to data from Johns Hopkins University.

As of Tuesday morning, the overall number of global coronavirus cases in the US has increased 10,051,722, while the deaths have surged to 238,201.

The two tallies currently account for the highest in the world, making the US the worst-hit country.