Key issues

US: end of cycle and long-term outlook

The US credit cycle: how much should it concern us? Part II

• While household debt is in a relatively comfortable position, financial vulnerabilities have arisen in corporate debt. • In particular, we show how investors now hold debt of companies with a higher risk profile and are somewhat less protected. The US’ current expansionary phase is on course to become the longest in history and, so far, there have been no major shocks. However, over the past few years some financial imbalances have arisen, especially in the corporate sector, which could destabilise the wider economy in an adverse macroeconomic scenario. 1...