As companies confront the possibility that it could be a while before the Federal Reserve cuts rates, some organizations are saving millions with interest rate swaps, The Wall Street Journal reports.
Following a string of higher-than-expected inflation readings, the Fed has said it is prepared to keep rates high for a longer period. With uncertainty regarding when inflation will ease and when the Fed will cut its rates, companies are turning to interest rate swaps.
These swaps convert floating interest rates to fixed, or vice versa, depending on their financial objectives. Some companies have locked in fixed rates on their floating rate debt, such as term loans or revolving lines of credit, which helps the companies save. But, as the Wall Street Journal writes, the timing of these transactions can be tricky.
