In a previous article, I described how corporate profitability is inversely related to the level of interest rates. In other words, low interest rates lead to high corporate profits, and high interest rates lead to low corporate profits.
The following charts do a good job of illustrating this. The first chart (corporate profits after tax divided by GDP) shows a rough V-shape, with the nadir occurring around 1986.
In the second chart, we see an upside-down V-shape, reaching its zenith around 1984.
Source: Simcha Barkai and Seth Benzell, "70 Years of Corporate Profits"
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