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Automatic TRANSCRIPT

Jay Powell went up to Capitol Hill today. The Fed chair here did his twice yearly congressional briefing lawmakers technically in case you're curious called the monetary policy report the T. l.. Dr Goes like this economy is basically fine. Yeah he's bit word. About Corona virus. Trade has settled somewhat buddies keeping an eye on it. Interest rates aren't going anywhere but then at one point in his report Powell. Well he wrote this and this is a quote levels of business debt continued to be elevated with the riskiest firms accounting for most most of the increase in debt in recent years. Now the reason. That's a worry. Well 'cause when not if but when things go economically south that debt it is going to be harder to pay back and that is not a good thing marketplace's Mitchell Hartman gets us going. Interest rates are low right now by historic standards. It doesn't cost Salaam to borrow money. Chris Zeffirelli at independent advisor. Alliance says it's true for a family buying a house you have a higher credit score and you're unable able to lower mortgage rates are lower car loans whereas if you were considered more of a risky borrower you'd have to pay higher interest rates. The same thing is true for corporations. And it's it's the high risk corporate bonds that are on the rise. This isn't the Amazon Google Nike facebooks of the world with plenty of cash on hand. Zeffirelli says it's companies that are very capital intensive in terms of having property plant equipment so industrial companies energy companies especially those exposed to risks six lake drilling for oil or buying land. Some pension and mutual funds are looking to hire risk bonds because returns aren't high enough on safer. INVESTMENTS INVESTMENTS SAYS University of Portland Finance Professor Bryan Adams. They need to earn five six seven percent to be able to do that. They gotta find riskier debt. Now now this rise in low grade corporate debt could be dangerous if companies start to see sales fall and cash flow decline says Mark Zandi at Moody's John Olympics. Do they pay on their debt. Start to pull back on their hiring vestment that were exacerbate the economic downturn similar to how risky mortgage debt contributed attributed to the financial crisis a decade ago. I'm Mitchell Hartman for