Federal Reserve Chair Jerome Powell noted during a talk at Harvard University today that the turmoil the private credit sector has seen in recent weeks is not indicative of a broader risk to the financial system.
Powell added that the $3 trillion private credit industry is a “relatively small slice” of the asset pool and is something that the Fed is watching “super carefully,” MSN reported.
“I’m reluctant to say anything that suggests we’re dismissive of the risk but we’re looking for connections to the banking system and things that might result in contagion. We don’t see that right now,” he said. “What we see is a correction going on and certainly they’ll be people losing money and things like that, but it doesn’t seem to have the makings of a broader systemic event.”
Regulators are “well aware of what the bank’s exposure is,” Powell added. They …
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