sting in the rafters
slimey56
Jr. Member
Posts: 1,490
Political Matrix E: -6.46, S: -7.30
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« on: March 20, 2022, 09:43:56 PM » |
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A hike in rates should slightly impact on Q1/Q2 earnings in higher d/e ratio industries, though not current assets as most major players obvi have the cashflow to manage the costs of commercial paper. The key is ensuring this loss is only felt in retained earnings, not passed along as corporate profits continue to outpace inflation. On the other hand, most firms are already running lean as-is, which in turn means increases in commercial loan/mortgage rates could curtail PP&E investment. Skilled labor would become even more valuable as the premium on PP&E and devoting resources to training gives them stronger bargaining positions.
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