Corporate Interest Expenses Are Expected to Increase Further

Phillip An, Huixin Bi and W. Blake Marsh
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Phillip An: https://www.kansascityfed.org/research-staff/phillip-an/
W. Blake Marsh: https://www.kansascityfed.org/research-staff/w-blake-marsh/

Economic Bulletin, 2024

Abstract: Although firm leverage has fallen from pandemic highs, rising interest rates have raised firms’ interest expenses. The effects of this monetary policy tightening are likely to continue unfolding over the next few years. As low-yield, fixed-rate corporate debt issued during the pandemic matures, firms may need to refinance this debt at higher rates, further increasing their interest expenses. However, most corporations are well-positioned to carry these interest expenses so long as their earnings remain stable.

Keywords: monetary policy; corporate debt; interest expenses (search for similar items in EconPapers)
Date: 2024
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