Fed's Kaplan: Risky Debt Could Be Burden on Economy in a Downturn

The video discusses concerns about the rise in non-financial corporate debt, highlighting the potential economic risks during downturns due to high leverage. It examines the role of low interest rates in encouraging borrowing and its impact on asset prices and corporate behavior. Additionally, it addresses consumer debt, noting that while corporate leverage is high, the household sector is in better shape due to increased incomes and a strong job market.

What concerns are being raised about non-financial corporate debt?

What impact could high corporate leverage have during an economic downturn?

What factors are contributing to the current state of consumer credit and defaults?

How does the current leverage situation of non-financial corporates compare to ten years ago?

In what ways has the household sector's financial situation changed compared to the corporate sector?