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too much fixed rate debt creates an exposure to falling long term interest rates why this happen plz
I don’t know where you read this, but on its own it is not really a terribly sensible statement (maybe it is in the context of what was written before and after it 🙂 ).
Without me knowing what else was written, what it means on its own is that if we have (for example) borrowed at 10% fixed rate, then even if interest rates fall in the future then we will still have to keep paying at 10% and obviously we will be rather unhappy and wished that either we had borrowed at floating rate (where the interest rate changes) or wish that we had not borrowed so much and if we needed more later then borrowed it later when the interest rates are lower.
Obviously we never know in advance what will happen to interest rates, and so it is a risk we have taken by borrowing at fixed interest.
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