The coming long-run slowdown in corporate profit growth and stock returns
Abstract: Over the past two decades, the corporate profits of stock market listed firms have been substantially boosted by declining interest rate expenses and lower corporate tax rates. This note's key finding is that the reduction in interest and tax expenses is responsible for a full one-third of all profit growth for S&P 500 nonfinancial firms over the prior two-decade period.
Part of Series: FEDS Notes
Publication Date: 2022-09-06