Many companies with special needs for cash or less-than-perfect credit profiles borrowed when interest rates were low to keep their financial houses in order. Now that the U.S. Federal Reserve has not only raised rates but also has vowed to keep them aloft for as much as another year or more, those companies are increasingly at risk.
The U.S. Federal Reserve’s message that it will not cut interest rates any time soon has finally convinced investors.
It’s all in the numbers. The Dow Jones Industrial Average closed down 430 points today and the S&P 500 fell to its lowest level since the start of June.
If you were to ask the average person “what happened during the 2007-2008 Stock Market Crash/Financial crisis?” What caused it? You may hear answers like; “it was brought on by banks who were writing subprime mortgages, giving mortgage loans to anyone with a heartbeat-regardless of if they had a job, or even the ability to make mortgage payments.”
In July, the Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, and U.S. Federal Reserve proposed a regulation to require banks with $100 billion or more in assets—so-called “megabanks”—to set aside more capital as reserves against loan losses and to ensure general operational stability.
In the quarter ending 31 August, FedEx took in $21.7 billion in revenue, 6 percent less than a year earlier. Even so, it reported a profit of $1.08 billion, compared to $875 million in the same quarter in 2022.
Sales of existing homes slipped 0.7 percent in August from July and fell 15.3 percent from August 2022, setting their slowest pace since January, the National Association of Realtors (NAR) reported.
Through August, 450 U.S. corporations have claimed bankruptcy, more than the total in either 2021 or 2022, according to a report by Guggenheim Investments.
Aside from the early days of the Great Recession, credit card issuers are seeing their losses mount at the fastest rate since the mid-1990s, CNBC reported.
Last week, the dollar rose to six-month highs against the euro, pound, and yen after U.S. Federal Reserve officials said the bank expects to keep interest rates higher longer than they had earlier predicted.