Higher rates will push up firms’ debt costs gradually, says research
Authors warn that financial vulnerability could stem from higher-for-longer rates
Non-financial firms in advanced economies will only experience the costs of higher interest rates gradually, says new research from the Federal Reserve Board. However, continued high rates could lead to increasing financial vulnerability.
The report, Monetary Policy Tightening and Debt Servicing Costs of Non-financial Companies, looks at the aggregate maturity for bonds held by these firms. It finds the cost of existing debt in advanced economies “increased at a much slower rate” than new
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