Corporate pandemic cash buffer is running low, finds research
The impact of monetary policy could grow as companies’ cash dwindles, Boston Fed paper says
New research finds the cash buffer accumulated by US businesses during the pandemic is running low, magnifying the effects of monetary policy tightening.
Firms’ Cash Holdings and Monetary Policy Transmission finds “firms accumulated an unprecedented level of cash and cash equivalents in 2020 and 2021”. The research, authored by Falk Bräuning, José Fillat and Gustavo Joaquim, was published by the Federal Reserve Bank of Boston on October 12.
“Due to this depletion of the accumulated cash buffer
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