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Hospitals, Cities Hit by Surging Interest Rates in 2008 Echo

  • As cash yanked from market, yields on variable-rate bonds jump
  • The rates on tens of billions of dollars of debt surge
A medical tent to be used for drive-thru testing of Covid-19 is seen outside of the Carney Hospital in the Dorchester neighborhood of Boston.
Photographer: Scott Eisen/Bloomberg
Updated on

On Wednesday, as a hospital system in Memphis, Tennessee, was preparing for how to combat the spreading coronavirus, the havoc the pandemic was causing on Wall Street rippled down with its own financial hit.

Investors were rapidly hoarding cash as the economy grinds to a near halt, creating an exodus from the corner of the municipal-bond market where the health-care provider had raised cash.