The stance of U.S. monetary policy has tightened significantly starting in March 2022. At the same time, the share of nonfinancial firms in financial distress has reached a level that is higher than during most previous tightening episodes since the 1970s (Figure 1). What are the consequences of a high share of distressed firms—i.e., firms close to default—for the transmission of monetary policy? In this note, we show that firm investment and employment respond strongly to contractionary monetary policy when firms are in distress. In contrast, investment and employment respond weakly for firms that are not in distress or after policy easing shocks
This type of language doesn't generate clicks and thus doesn't contribute to the manufactured consent that businesses want to happen. This whole article reeks of garnering support/sympathy for...
This type of language doesn't generate clicks and thus doesn't contribute to the manufactured consent that businesses want to happen. This whole article reeks of garnering support/sympathy for companies who are now having to deal with the consequences of no longer having access to cheap debt and all of their awful decisions they made.
Articles by the Fed are written to avoid getting the wrong kind of attention, which might cause either market panic or get politicians upset. Casting blame isn’t something they’re going to do...
Articles by the Fed are written to avoid getting the wrong kind of attention, which might cause either market panic or get politicians upset. Casting blame isn’t something they’re going to do explicitly because that would definitely attract criticism.
They leave that to other people who know how to read between the lines.
The actual paper is less alarmist... Distressed Firms and the Large Effects of Monetary Policy Tightenings
This type of language doesn't generate clicks and thus doesn't contribute to the manufactured consent that businesses want to happen. This whole article reeks of garnering support/sympathy for companies who are now having to deal with the consequences of no longer having access to cheap debt and all of their awful decisions they made.
Articles by the Fed are written to avoid getting the wrong kind of attention, which might cause either market panic or get politicians upset. Casting blame isn’t something they’re going to do explicitly because that would definitely attract criticism.
They leave that to other people who know how to read between the lines.
To be honest, I find the actual fed's title is the complete opposite of interesting or informative.