The Federal Reserve escalated its warnings about the perils of risky borrowing by businesses Monday, saying firms with the worst credit profiles are the ones taking on more and more debt.
“The historically high level of business debt and the recent concentration of debt growth among the riskiest firms could pose a risk to those firms and, potentially, their creditors,” the Fed said. Here is a direct video link.
Also see: Fed’s Powell says financial risks are moderate; these charts don’t agree.
While the Fed is warning on credit risk, as usual, they have enabled it and have no plan to help deflate the problem. After keeping policy rates near the zero bound for years, the Fed has paused hiking plans at a base rate of just 2.5% heading into an economic downturn. There is no cavalry available to fight the next recession.
;
