Listen to "Reality Check with Ben Swann" on Spreaker.

Businesses Take Negative Outlook After Federal Reserve Raises Rates

Must Read

Answer to Trump Social Ban and Parler Removal De-centralization?

Answer to Trump Social Ban and Parler Removal Decentralization? - powered by ise.media Is the answer to the permanent ban...

New Impeachment NOT About Riots, About Stopping Trump Run in 2024

New Impeachment NOT About Riots, About Stopping Trump Run in 2024 - powered by ise.media The effort being put forward...

Trump Supporters Who Stormed Capitol Building are Protestors, NOT Terrorists or Insurrectionists

Trump Supporters Who Stormed the Capitol Building are Protestors NOT Terrorists or Insurrectionists - powered by ise.media Media and Politicians...
Michael Lotfihttp://brandfireconsulting.com
Michael Lotfi is a Persian-American political analyst and adviser living in Nashville, Tennessee. Lotfi is the founder and CEO of BrandFire Consulting LLC. The firm specializes in public and private technology centered brand development, lead generation, data aggregation, online fundraising, social media, advertising, content generation, public relations, constituency management systems, print and more. Lotfi is the former executive state director for the Tennessee Tenth Amendment Center, a think-tank focused on restraining federal overreach. Lotfi graduated with top honors from Belmont University, a private Christian university located in Nashville, Tennessee.

An interest rate hike earlier this month looks to negatively affect some businesses as they are least prepared to handle it.

In the first increase in rates since 2006, the Federal Reserve raised interest rates by 25 basis points on loans earlier this month. While some tout the move as being a good sign for the economy, a recent survey of companies by Standard & Poor shows numerous companies with low credit ratings and negative outlooks in a recent survey.

As part of the Federal Reserve’s increase in rates, the bank announced its intention to gradually increase the rate further as economic conditions permit.

- Newsletter -

It could take a few years for the current increase to impact companies as they look to refinance existing debt or take out new loans.

The number of companies described as “weakest-links” by S&P came in at 195, the highest number since March of 2010. The bulk of the weakness comes from the oil and gas and financial sectors, accounting for 34 and 33 of the 195 respectively.

A two year slide in the price of oil has caused a significant decrease in domestic drilling for oil, with companies such as Pioneer Natural Resources already cutting 250,000 jobs with additional layoffs expected. CEO Scott Sheffield stated in an email the company has plans to trim 20 to 30 percent of it’s budgets in 2016, a reality which can be seen across the oil and gas industry.

Bond markets are also a factor, combining with the interest rate hike and the projected profit weakness in a number of sectors. A measure of the amount of risk priced into bonds, known as the U.S. distress ratio, came in at 20.1% in November. This is the highest level for the index since September 2009 when the ratio hit 23.5% according to S&P.

Of the indicators used by S&P, the oil and gas industry accounts for the highest dollar value of distressed debt which comes in at 37% of outstanding debts. The metals, mining and steel industry, while not as consequential in terms of dollar value, is shown to have 72% of its assets as distressed.

FOLLOW MICHAEL LOTFI ON Facebook, Twitter & LinkedIn.

- Advertisement -

Featrued Sponsors

video

Texas Files Lawsuit Asks SCOTUS To Block 4 States From Participating in Electoral College

Texas Files Lawsuit Asks SCOTUS To Block 4 States From Participating in Electoral College - powered by ise.media Check out our sponsor Kim Daly and...

Unstoppable Domains

Uncensorable blockchain domains. Every domain purchase supports Ben Swann and Truth in Media

Holland Center

Holland Center is a day treatment program and medical clinic for children with autism.
- Advertisement -

Latest News

video

Answer to Trump Social Ban and Parler Removal De-centralization?

Answer to Trump Social Ban and Parler Removal Decentralization? - powered by ise.media Is the answer to the permanent ban...
video

New Impeachment NOT About Riots, About Stopping Trump Run in 2024

New Impeachment NOT About Riots, About Stopping Trump Run in 2024 - powered by ise.media The effort being put forward by House Democrats to Impeach...
video

Trump Supporters Who Stormed Capitol Building are Protestors, NOT Terrorists or Insurrectionists

Trump Supporters Who Stormed the Capitol Building are Protestors NOT Terrorists or Insurrectionists - powered by ise.media Media and Politicians have spent the last seven...
video

The Biggest Problem With C0ViD V@ccin3s

The Biggest Problem With C0VlD V@ccin3s is the inability to even question them! The Biggest Problem with Vaccines - powered by ise.media Learn about our new...
video

Gates Says No Normal Until 2022, U.S. Billionaires Increase Wealth by $1 Trillion Since Lockdowns

Bill Gates says no normal until 2022; U.S. Billionaires increase wealth by $1 Trillion since lockdowns began just nine months ago. Gates Says No Normal...
- Advertisement -

More Articles Like This