Journal Article

Corporate Interest Expenses Are Expected to Increase Further

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;

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Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Bulletin

Publication Date: 2024-02-02