2019-06-05 10:34:00 Wed ET
federal reserve monetary policy treasury dollar employment inflation interest rate exchange rate macrofinance recession systemic risk economic growth central bank fomc greenback forward guidance euro capital global financial cycle credit cycle yield curve
Fed Chair Jay Powell suggests that the recent surge in U.S. business debt poses moderate risks to the economy. Many corporate treasuries now carry about 40% debt as part of equity market valuation. St Louis Federal Reserve Bank recent data indicate that the corporate-debt-to-EBITDA ratio has risen to the upper range of 2.3x to 3.1x.
Powell warns that the current level of business debt can cause financial stress to borrowers if the economy weakens. However, Powell adds the cautionary caveat that business debt may not present imminent risks to U.S. financial system stability, household consumption, and business growth. As the Federal Reserve continues to assess the main amplification of business debt deterioration, short-term liquidity risk remains moderate in the core U.S. financial sector. In the meantime, the Trump administration seeks to raise fiscal deficits to support ambitious public programs on infrastructure, education, residential estate, health care, and social security etc. This public debt accumulation may crowd out intertemporal business debt capacity at the margin. If the U.S. aggregate debt capacity remains invariant over time, the government either has to tolerate higher inflation in the form of seigniorage taxes, or needs to reconsider the ripple effects of incremental corporate debt on the real economy.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2019-08-04 08:26:00 Sunday ET

U.S. and Chinese trade negotiators hold constructive phone talks after Presidents Trump and Xi exchange reconciliatory gestures at the G20 summit in Japan.
2026-01-19 10:30:00 Monday ET

Andy Yeh Alpha (AYA) fintech network platform: major milestones, key product features, and online social media services Introduction
2018-04-26 07:37:00 Thursday ET

Credit supply growth drives business cycle fluctuations and often sows the seeds of their own subsequent destruction. The global financial crisis from 2008
2023-12-09 08:28:00 Saturday ET

International trade, immigration, and elite-mass conflict The elite model portrays public policy as a reflection of the interests and values of elites. I
2018-12-20 13:40:00 Thursday ET

T-Mobile and Sprint indicate that the U.S. is likely to approve their merger plan as they take the offer from foreign owners to stop using HuaWei telecom te
2019-10-05 07:27:00 Saturday ET

Treasury Secretary Steven Mnuchin indicates that there is a good conceptual trade agreement between China and the U.S. in regard to intellectual property pr