Very low interest rates created an easy-money environment for companies to do well, but those days are over, said veteran investor Howard Marks, in a new podcast.
— Howard Marks, co-chairman of Oaktree Very low interest rates created an easy-money environment for companies to do well, but those days are over, said veteran investor Howard Marks, in a new podcast. “And the one thing I’m confident of is that interest rates are not going to decline by another 2,000 basis points,” he said. “In 1980, I had a loan personally at 22.25%, and in 2020, I was able to borrow at 2.25%, so rates went down 2,000 basis points. Not going to happen again, there’s no room for it.”
Like Guggenheim Partners’ Anne Walsh, he says it’s a bond-picker’s market, given the backdrop of higher rates, but also that the COVID crisis already shook out some of the sector’s weaker borrowers a few years ago.