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A cold snap in corporate bonds
Apr 8, 2025
Corporate bond issuance is at a standstill, leaving firms hesitant to invest long-term. The Democratic Republic of the Congo's extended cobalt export ban is set to impact global prices amid rising competition. Meanwhile, closures in the bar and restaurant sector reflect the struggles of local businesses post-pandemic. The podcast also tackles listener questions on trade policy, highlighting how tariffs and changing geopolitical dynamics are reshaping the economy.
25:34
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Quick takeaways
- The slowdown in corporate bond issuance due to economic uncertainty is forcing companies to prioritize short-term investments over long-term growth.
- Geopolitical tensions and unresolved issues in U.S.-Russia relations pose significant risks for American companies considering re-entering the Russian market.
Deep dives
Impact of Tariffs on Global Trade
The implementation of tariffs by the president is expected to significantly alter global trade dynamics. As the tariffs take effect, there is a growing concern among companies about the uncertainties associated with borrowing costs, leading to a slowdown in the issuance of corporate bonds. Companies are hesitating to enter the bond market due to elevated interest rates, which can substantially increase long-term expenses akin to a mortgage burden. This atmosphere of uncertainty is likely to cause firms to shift their focus towards short-term investments rather than long-term projects, negatively impacting overall economic growth.
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