In my personal opinion, US business do not fail from high interest rates. They fail from a sudden shift in business conditions.
[Regnum] The decision of the US Federal Reserve System (FRS) to postpone the cut in the refinancing rate for a couple of years may provoke a wave of bankruptcies among American companies due to expensive loans. This, as reported by Bloomberg , was warned by the chairman of Renta 4 Bank Juan Carlos Ureta.
“If these monetary conditions continue for as long as the Fed says, we will see massive bankruptcies in the corporate sector, and this process is just beginning,” he said.
Due to the high U.S. base rate, firms’ spending on loan repayments in the first quarter of 2023 was 22% higher than a year earlier, according to the agency. In May, the country recorded 16 corporate defaults, when companies failed to pay interest on loan bonds, before that there were six more.
By January 2024, U.S. companies will have about $260 billion of debt due within a year, about double the current level, according to US financial conglomerate Morgan Stanley.
As IA Regnum reported , in May 2023, the International Monetary Fund warned that serious problems were expected in the banking sector while maintaining high interest rates. According to experts, this may lead to an increase in the number of bankruptcies among banks.