Fixed-rate debt blunting impact of Fed hikes

The prevalence of fixed-rate debt suggests the Fed’s aggressive rate hikes will continue to deal less damage to the economy than they might have done in the past. But higher rates are still likely to take a further toll on consumption and business investment over time as more debt needs to be refinanced, while also continuing to weigh on demand for new loans. Moreover, the rise of fixed-rate debt implies that the Fed may eventually need to cut rates more aggressively if it wants to support the economy further ahead.