U.S. | Corporate debt in the twilight of the credit cycle

Summary

Nonfinancial corporate debt-to-GDP is high, but debt-to-assets and debt-to-earnings remain moderate. Solid earnings, tax cuts and low real interest rates allow corporations to service their debt without problems. However, tighter financial conditions, a slowdown in profit growth and higher risk aversion will lead to higher debt distress and deterioration in credit quality.

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