FALN - CRE Gets Strangled Corporate Bankruptcies Highest Since 2010 But Junk Bonds And Broad Financial Conditions In La-La-Land
2024-07-23 07:20:00 ET
Summary
- Financial conditions are getting looser overall despite Fed rate hikes and QT measures.
- Bankruptcy filings by larger corporations are at a 13-year high, with trouble in the junk-bond and leveraged-loan markets.
- Distressed debt exchanges are on the rise, indicating companies are struggling with substantial debt difficulties.
The big divergence. Here's what's going on.
For well over a year, there has been somewhat of a puzzle: How financial conditions, as tracked by broad measures such as the Chicago Fed's National Financial Conditions Index, have been getting looser since March 2023, and are now at the loosest level since November 2021, even though the Fed has hiked policy rates to 5.5% at the top-end and engaged in $1.7 trillion in QT so far in order to tighten financial conditions. Powell has been pushed many times on this point during the FOMC press conferences....
CRE Gets Strangled, Corporate Bankruptcies Highest Since 2010, But Junk Bonds And Broad Financial Conditions In La-La-Land