Fed’s Barr Says Private Credit Stress Could Trigger Larger Credit Issues

Federal Reserve Governor Michael Barr is the latest official warning of private credit-related concerns. Stress in that market could lead to “psychological contagion” and thus set off a wider credit crunch, Barr said in an interview with Bloomberg News published Sunday (May 3). He told Bloomberg that although direct connections between banks and private credit do not yet seem “super worrisome,” there were other areas of concern, including the insurance industry’s ties to private lenders.