Corporate debt is at its highest due to zero or negative interest rates. Money is created out of thin air to give the appearance of a buoyant economy. All those militarized police are here to protect a system that is already in default, yet the oligarchs are fleeing anyway.Low interest rates are not a sure sign of default. That would be high interest rates that are a sure sign of default. If you are getting a low interest rate, you are not being charged much for a risk of default. Interest rates are a sum of the cost of money over time, the risk of inflation, and the risk of default. For interest rates to be this low, there must not be much risk of inflation or default.
The Fed only has control over the interest on borrowing from the government. It can do little to raise overall interest rates in an economy with so much capital seeking some return. This is a global problem with some European countries issuing bonds with actual negative rates. Of course money is fleeing to America.
This is a fun exchange, Walt.