WASHINGTON: The American private sector's mounting debts pose a"moderate" risk to the world's largest economy, Federal Reserve Chairman Jerome Powell said on Monday .
"As of now, business debt does not present the kind of elevated risks to the stability of the financial system that would lead to broad harm to households and businesses should conditions deteriorate," Powell said.Economists warn that after years of economic recovery and low interest rates, companies across the spectrum of US industries now frequently have debts that are several times greater than their earnings, with debt growing faster than the economy for the last decade.
Banking reforms after the crisis have made the financial sector resilient enough to handle such losses, there are few signs of an asset price bubble and the investment vehicles used to trade in debt are more sound, according to Powell.Channel NewsAsia - Sentifi topic widget
High debt = High risk. USA have very high debt. Very high risk.