Due to the impact of high interest rates, the world is facing a wave of corporate defaults and bankruptcies. This is not just a problem in the U.S.; global debt default rates are also rising, putting immense pressure on the global economy.foreign tradeOctober 21, 2024 12:22

Amid the ever-changing global economy,

Behind this phenomenon lies the central banks continued measures to combat inflation, with the impact of global interest rate hikes beginning to show. August data directly revealed the severity of the issue: there were 107 corporate debt defaults globally, the highest monthly total since 2009.

Collin Martin, fixed income strategist at Charles Schwab, pointed out that many companies borrowing costs in 2023 have doubled or even nearly tripled compared to previous years. This is undoubtedly a heavy blow to corporate balance sheets.

Current data shows that the effective yield on below-investment-grade corporate bonds has surged to 9%. This is direct evidence of rapidly rising corporate costs. Meanwhile, the 10-year U.S. Treasury yield has again hit a new high, exceeding 4.8%.

Martin further explained that due to high interest rates, when companies attempt to issue or refinance debt, they must do so at yields far higher than in the past. This means they must pay more interest. Against a backdrop of slowing corporate revenue, this severely impacts profitability.

For some zombie companies, this environment is particularly harsh. These firms survived in ultra-low interest rate conditions but now face significant difficulties in the current economic climate.

Facing these challenges, Fitch Ratings issued a concerning forecast: by the end of 2023, the default rate for high-yield bonds may reach 4.5%-5%, more than six times the 2021 default rate.

更令人憂心的是，Martin預測，到2024年，美國的破產和債務違約的總數可能會激增。這種狀況將可能導致美國經濟進入衰退。破產或背負沉重債務的公司可能會在恢復經濟健康的過程中大量裁員，這對于整個經濟體系都是一個巨大的打擊。

Overall, the current economic conditions present a severe test globally. Consumers pandemic savings are dwindling, the resumption of student loan payments and soaring bond yields will further increase economic pressure. Market experts note the yield curve inversion has persisted, typically signaling an impending recession.