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How Corporate America Benefited From Fed’s Rate Hikes
When it comes to explaining the conspicuous absence of "the most well-telegraphed recession in US history" (as some observers describe the downturn that still hasn't occurred), the juxtaposition between very low debt servicing costs and very high rates on interest-bearing cash is among the most-commonly cited factors.
This is one (but not the only) way in which higher rates are arguably contributing to inflation, or at least serving as an impediment to the Fed's efforts to run the proverbial "l
This happy circumstance is largely limited to large and public companies with access to fixed income markets. Smaller and private companies – from small biz up to $1BN revenue – are more dependent on bank lending and have been squeezed between costs, consumers, and large companies. I saw a study indicating the “middle market” has seen EBITDA and EBITDA margins contract by 25% since 2019.