Tag: Federal Reserve

The statement that the Federal Reserve (Fed) is responsible for a surge in zombie firms, which are companies with persistently low profits that are unable to cover their interest payments, is a complex and debated topic. It is important to note that the causes of zombie firms are multifaceted and cannot be solely attributed to the actions of the Fed. However, there are some arguments that suggest a potential link between Fed policies and the rise of zombie firms. One argument revolves around the low interest rate environment created by the Fed. In response to economic downturns or to stimulate economic growth, the Fed often implements expansionary monetary policies, such as lowering interest rates. These low interest rates can make it easier for struggling companies to access cheap cred...