(Reuters) -U.S. Federal Reserve Chair Jerome Powell said on Wednesday that the debt problems of property developer Evergrande seem particular to China and that he did not see a parallel with the U.S. corporate sector.

Evergrande is Asia’s largest junk bond issuer. This led to a sharp sell-off on Wall Street. Spreads on U.S. high yield bonds increased on Monday but markets have stabilized. ()

There is not much direct exposure to the United States in terms of its implications. Powell spoke after the Fed policy meeting, saying that while big Chinese banks don’t have a lot of exposure you could worry about how it might affect global financial conditions. However, I don’t see any comparison to the United States corporate sectors.

The Fed was worried about a surge in defaults among highly leveraged businesses due to the coronavirus epidemic last year. However, that didn’t happen because the U.S. CARES Act, and the action of the central bank, prevented it. He stated that corporate default rates currently are “very low.”

Evergrande was mentioned by Powell as a country with a high level of debt in China for an emerging market and its government having put into place new regulations for leveraged businesses.

Evergrande announced Wednesday that it would settle the interest payments for a domestic bond while the Chinese central banking injected cash into banks to temporarily ease investors’ concerns about imminent contagion. This was in contrast with the pressure on equity markets and other more risky assets earlier this week.