According to MarketWatch, Guggenheim Investments has reported that corporate bankruptcies in the United States might soon reach their highest level since 2010.
This forecast is attributed to a significant increase in borrowing expenses and economic uncertainty.
As of the end of August, more than 450 companies have sought bankruptcy protection this year, surpassing the annual totals of the previous two years.
Guggenheim analysts have expressed scepticism about a rapid resurgence in the US economy due to the absence of supporting factors.
They cautioned that the diminishing impact of these favourable conditions will be a gradual process, with the peak of their influence on the economy now in the past.
With reduced support from factors like disinflation, fiscal policy, and the labour market, it is anticipated that the economy will decelerate by the end of the year, and analysts believe that a recession is probable by early 2024.
This economic uncertainty has been exacerbated by the Federal Reserve’s decision to raise its policy rate from 5.25% to 5.5%.
While the regulator maintained this benchmark rate at a 22-year high in its recent announcement, it also indicated its readiness to increase rates further to combat inflation.
