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Monetary Policy Tightening and Debt Servicing Costs of Nonfinancial Companies

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Abstract

Rapid monetary policy tightening in most advanced economies in 2022 and 2023 was accompanied by substantial increases in prevailing interest rates for new credit to businesses and households. In addition to increasing the cost of new borrowing, monetary policy tightening may also be associated with increases in costs of servicing existing debt, potentially leading to the tightening of firms' and households' financial constraints, leaving them with less cash for investment and consumption.

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  • Yuriy Kitsul & Bill Lang & Mehrdad Samadi, 2023. "Monetary Policy Tightening and Debt Servicing Costs of Nonfinancial Companies," FEDS Notes 2023-12-01, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfn:2023-12-01
    DOI: 10.17016/2380-7172.3410
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