Junk Bonds  

More than $200 billion of investment-grade bonds could fall into the $1.2 trillion junk-grade category during the next economic downturn, Fitch Ratings estimates in a new report, adding to a growing chorus of regulators and Wall Street analysts warning of the risk.

Randal Quarles, the Federal Reserve's vice chair for supervision, says regulators need to be vigilant about new risks from lenders that operate outside of the strictest banking-industry rules - as well as from the increasing push by technology companies into lending and asset management.

The Census Bureau reports that new orders for manufactured durable goods orders increased by 1.2% in December, below economists' average forecast for a 1.7% increase.

Minutes from the Fed's January meeting also show the Federal Open Market Committee discussed terminating or modifying a plan to reduce the central bank's roughly $4 trillion balance sheet.

Loans to companies with low credit ratings swelled by 15% last year to $1.3 trillion, prompting warnings from the Federal Reserve and International Monetary Fund. Yet Wall Street firms that are deeply immersed in the market, from banks including JPMorgan Chase to private-equity firms like Blackstone, say they don't see what the problem is.