“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. At the same time, the level of debt certainly could stress borrowers if the economy weakens”, Federal Reserve Chairman Jerome Powell said at the Financial Markets Conference in Amelia Island, Florida.

The issue of corporate debt has surfaced as companies continue to use the low rates the Fed has provided to lever up their balance sheets. Particular concern has been raised about companies whose bonds are rated close to junk and would have trouble rolling over that debt should rates continue to rise.

Powell said the Fed “continues to assess the potential amplification of such stresses on borrowers” but called those risks “moderate” at this point.

His speech focused solely on risks to the financial system and did not delve into monetary policy and the Fed’s intentions regarding interest rates.