The United States is currently experiencing a “historic surge” of corporate bankruptcies as heavily indebted companies grapple with the challenges of adapting to the new era of high interest rates and inflation, two economic factors endemic to President Joe Biden’s term.

According to new data published by S&P Global Intelligence, 75 companies filed for bankruptcy in June, which is the highest number in a single month since early 2020 during the height of the COVID-19 pandemic. The filings pushed this year’s total to 346 so far, which is much higher than previous levels spanning the past 13 years, the New York Post reported.

Before now, the highest half-year bankruptcy record came in 2010, during the aftermath of the 2007-08 financial crisis, when 437 companies had filed for bankruptcy between January and June.

The S&P report cited high interest rates along with slower consumer spending and ongoing supply chain issues as the cause of the spike in bankruptcies, The Post reported.

The Post adds:

The Federal Reserve raised interest rates sharply in 2022 and 2023 to the highest level since 2001 in a bid to crush high inflation, bringing to an end more than a decade of ultra-easy money. Officials are now grappling with when they should take their foot off the brake amid signs that economic growth is slowing and inflation is once again falling.

Most investors expect the Fed to begin cutting rates in September or November and are penciling in just one or two reductions this year — a dramatic shift from the start of the year, when they anticipated six rate cuts beginning as soon as March. Even then, rates will likely remain elevated. 

Some economists have urged the U.S. central bank to reduce rates sooner, citing concerns that high interest rates present a risk to the financial system.

“The economy has weathered the Fed’s higher-for-longer strategy admirably well, but there is a mounting threat that the ongoing pressure will expose fault lines in the financial system,” Moody’s chief economist Mark Zandi wrote in a recent Washington Post op-ed. “As last year’s banking crisis showed, the relentless strain of high rates can cause parts of the financial system to buckle in ways that are difficult to predict and control.”