Market
Memos from Howard Marks: Easy MoneyFor more than a decade, historically low interest rates meant easy money for borrowers but challenges for lenders, who faced compressed profit margins. Recent U.S. Federal Reserve (Fed) rate hikes, spurred by persistent inflation, have changed that equation. Now, many banks are de-risking balance sheets and struggling to extend new loans at a time when they are overwhelmed by applications for credit from corporations and private equity sponsors, and private equity “dry powder” is near record levels.
This has important implications: