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High interest rates impact debt collectability

Inflation levels remain above the Federal Reserve’s target rate of 2%. The latest figures show U.S. inflation sitting at 3.36%, but business and consumer sentiment would suggest that prices are much higher. After falling for much of last year, inflation accelerated again at the start of 2024, reducing the likelihood of early rate cuts. The Fed’s next interest-rate meeting is set for June 11, and the overwhelming consensus of economists is that there will be no rate cuts from the current level of 5.25% to 5.5%. Why it matters: Interest rates determine the cost of borrowing and the ability...

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