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Market veteran Howard Marks says Fed is ‘not going back' to ultra-low rates

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That means credit can provide a “very solid foundation” to an investment portfolio, the Oaktree Capital Management co-founder told CNBC.

When the Federal Reserve starts cutting interest rates, it will not restore them to their post-financial crisis lows, according to veteran investor Howard Marks.

"The U.S. economy is doing quite well, and so it's not clear that it requires stimulus," Marks told CNBC's Frank Holland on Tuesday. The Fed pulled rates to near-zero through 2007 and 2008, before taking them slightly higher between January 2016 until the Covid-19 pandemic. Between 2009 and 2021 the federal funds rate averaged 0.5%, Marks said."My thesis is, we're not going back there to rates of zero, or a half, or one. I think that that is unnecessary stimulus, and I don't think permanent stimulus is a good thing," he said.

The impact of such ultra-low rates includes over-stimulating the economy and fueling inflation; making risky assets more attractive than they should be, with insufficient compensation for the increased risk; and causing too much fluctuation in the availability of capital, Marks said in January.

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