Fed Official – Corporate Bond Spreads Remain High

Federal Reserve Associate Director of Banking and Supervision Jon Greenlee said that corporate bonds remain persistently high “by historical standards.” Greenlee added that this is due to expected losses in corporate results and consequently higher risk levels. He said that credit conditions will stay restrictive for small businesses, even given muted demand due to weak growth prospects.

Greenlee’s comments came in a speech before the House Financial Services subcommittee.