Dalida Kadyrzhanova, Ander Pérez-Orive, Eliezer Singer
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Stress Testing the Corporate Debt Servicing Capacity: A Scenario Analysis
The total volume of outstanding debt issued by U.S. nonfinancial firms relative to GDP has increased by about 8 percentage points in the past decade. While a growing volume of debt was largely viewed as benign in the low interest rate environment of the 2010s, the rapid increase in both short- and long-term rates since early 2022 has raised concerns about the debt-servicing capacity of the corporate sector.