Report
The problem of returning to the nominal and real interest rates of the 2000s: Debt leverage is much higher now than it was then
We can be reassured about the consequences of the recent, and probably lasting, rise in nominal and real interest rates, noting that they are now back at around the level they were in the 2000s. Why are economies unable to bear the same interest rates as they did in the 2000s? The problem with this return to the interest rate levels of the 2000s is clearly associated with the fact that corporate leverage is much higher now than it was then . For the same level of short-term and long-term interest rates as in the 2000s, the interest paid by companies on their debt will, in the future, be 1 percentage point of GDP higher in the United States and 0.5 percentage point of GDP higher in the euro zone.
Provider
Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Other Reports from Natixis
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.