NEW YORK—The biggest companies in the country have avoided the damage of higher interest rates, a new report suggests.
“There are two key reasons that big business has avoided the hammer of higher rates,” the New York Times stated. “In the same way that the average rate on existing household mortgages is still only 3.6%, reflecting the millions of owners who bought or refinanced homes at the low-cost terms that prevailed until early last year, leaders in corporate America locked in cheap funding in the bond market before rates began to rise.”
Also, as the Fed pushed rates above 5%, from near zero at the start of 2022, chief financial officers at those businesses began to shuffle surplus cash into investments that generated a higher level of interest income, The Times said.
The combination meant that net interest payments — the money owed on debt, less the income from interest-bearing investments — for American companies plunged to $136.8 billion by the end of September, according to the report, a low not seen since the 1980s, data from the Bureau of Economic Analysis show.
Your Best Holiday Shopping Offer is Here!
The biggest, best and freshest news reporting in credit unions remains free! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more. So stop paying those bank-fee-like subscription prices from other so-called “news” publications!
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?