US business debt a 'moderate' risk to economy: US Fed chief Powell

US Federal Reserve Board Chairman Jerome Powell said that his country's business debt poses a moderate risk to the world's largest economy.
US Federal Reserve Board Chairman Jerome Powell said that his country's business debt poses a moderate risk to the world's largest economy.PHOTO: REUTERS

WASHINGTON (AFP) - The American private sector's mounting debts pose a "moderate" risk to the world's largest economy, Jerome Powell, the chief of the US central bank said on Monday (May 20).

"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 in prepared remarks meant for delivery in Florida.

Economists warn that corporate debts are at historic highs relative to the size of the US economy, with companies now frequently owing several times what they earn.