Stephanie Pomboy: That's a JUNK RATED company

Economist - Stephanie Pomboy: "Basically the Federal Reserve post that global financial crisis just flooded the system with money.And then when Co ban happened, they redoubled their efforts and just shoved so much stimulus into the economy and it inflated bubbles pretty much everywhere.You know, the stock, stock market has hit bubble extremes.The housing market went bananas.And then the corporate bond market, for example,junk rated borrowers were borrowing at 4% interest rates.I mean 4%, that's hardly any compensation for risk if you're lending to a company that's a junk rated company.

Tucker Carlson: By junk rated You mean that's the evaluation of the likelihood that company will repay its debt?
Stephanie Pomboy: Exactly.So the ratings agencies categorize those companies as having the least likelihood of actually being going into prison.
Tucker Carlson: That's a risky proposition to load a bunch of money to someone who's likely not to pay it back.

Stephanie Pomboy: Absolutely.But what got us to this point is that the Federal Reserve, when the more you push interest rates down,the more you force people to take those risks.Because if you say to somebody who's trying to save for retirement, well, you can get 0% in your savings account, the miracle of compounding is gone.So how are you going to get enough money to retire on?You have no choice but to kind of take more risk.
So you've got to at first you try to buy some investment grade papers, but that's only yielding 3%.That's not even going to break even with inflation. So you start going farther and farther out the risk curve."