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Corporate debt and quantitative easing

December 2019

Zombies stalk the bond markets

Writing in the Financial Times, senior investment manager Galia Velimukhametova explains why companies kept alive by low borrowing costs threaten to bring about a downturn.

Central bank intervention has propped the corporate sector up for much of the past decade and can continue to do so until inflation starts to rise. Meanwhile, a loosening of fiscal policy and a relaxation of trade tensions could spur profits. But when a business cycle becomes as long in the tooth as this one, the odds start to tilt towards a downturn. The signs are that the slump could start in the corporate debt market.

'Beware the dawn of the corporate dead'