Philadelphia Fed Chairman Patrick Harker said on Monday that the Federal Reserve should not consider additional interest rate hikes, as so many small businesses in the United States have been struggling to cope with the Fed's tightening policies so far.
After giving a speech at an online event on Monday and answering questions, Huck said, "Small companies do have difficulty obtaining funding. Some of the bankers I have talked to are concerned that their business plans cannot be implemented at high interest rates. I often hear such warnings in the summer
He also said, "That's why we should keep interest rates stable, and at this moment we shouldn't consider any rate hikes because if this is true - and this is indeed true, then we should let it go naturally
In recent months, Huck has been one of the largest doves at the Federal Reserve, believing that policymakers have raised interest rates enough to curb inflation.
Since the beginning of last year, the Federal Reserve has raised its benchmark interest rate by more than five percentage points, and officials stated in September that they may raise the benchmark interest rate again in 2023.
With the prominent side effects of the Federal Reserve's interest rate hike, corporate debt repayment pressure is increasing. According to a report released by Guggenheim in recent months, as of the end of August, more than 450 US companies have filed for bankruptcy protection this year, exceeding the total of the past two years. At this rate, it is expected that the number of bankruptcy applications this year will reach the highest level since 2010.
The Global Debt Monitoring report released by the International Institute of Finance (IIF) shows that in the first half of 2023, the total amount of global sovereign debt, corporate debt, and household debt increased by $10 trillion, reaching a record high of approximately $307 trillion.