In every other tightening cycle over the last 50 years, an increase in the federal funds rate was matched by a proportional rise in US corporate net interest payments. — Reuters
LOGIC suggests that US companies will benefit when the Federal Researve’s (Fed) interest rate-cutting cycle gets underway, because they will pay less to service their debt, but counter-intuitively, they may not see much of a net benefit at all this time around.
When the Fed raised rates between March 2022 and July 2023, corporate America’s net interest payments actually fell.
