Fed Warns Junk Debt Excess May Lead to Higher Defaults
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The Federal Reserve warned that froth in the riskiest parts of debt markets may lead to more defaults.
“Signs of excesses that could lead to higher future defaults and losses have emerged in some sectors, including for speculative-grade corporate bonds and leveraged loans,” according to a report published today by the central bank as part of Chair Janet Yellen’s semi-annual testimony to the Senate Banking Committee.