Credit Crunch Hits Bond Market

Tight corporate borrowing could slow economy
By Peter Fearon,  Newser Staff
Posted Aug 20, 2007 3:36 AM CDT
Federal Reserve Chairman Ben Bernanke appears before Congress in file photo from Wednesday, Feb. 15, 2006, in Washington. The Federal Reserve approved a half-percentage point cut in its discount rate...   (Associated Press)
camera-icon View 2 more images

(Newser) – Ripples from the credit crisis have reached the corporate bond market—threatening to slow down the economy by seriously limiting the ability of major corporations to borrow money for new projects,  the Washington Post reports. Credit problems have already begun to bite into the future plans of Hertz,  Deere & Co. and Home Depot .

Credit hasn't been as tight since the early 1990's. "It affects everything," said one analyst of the bond market. "It's access to capital. It's the lifeblood of a lot of big Standard & Poors companies. They've been encouraged to borrow money to make money for so long, and now the spigot's suddenly been shut off."