Rising government debt has pushed long-term yields higher and is increasing borrowing costs for businesses.
Expansionary fiscal policies and continued debt accumulation have been increasing risk premiums and capital costs for middle market businesses, as well as putting upward pressure on mortgage rates.
Still, the underlying fundamentals of the economy are strong, despite slowing gross domestic product in the second quarter. With the artificial intelligence build-out showing no signs of slowing down, and fiscal policies providing a strong tailwind, the economy is poised to continue its strong growth. The full discussion is in our latest issue of The Real Economy.
Also in this issue, we offer guidance for middle market businesses in navigating the K-shaped economy, where higher-income consumers are thriving while lower-income consumers struggle.
