Page 28 - The EDGE Winter 2024 WEB

Thoughts on Interest Rates and Growth
CONTINUED FROM PAGE 27

Change,” legendary investor Howard Marks are ancient history has gained popularity with
of Oaktree Capital wrote, many seasoned market strategists in recent
months. Now the Fed's unofficial mantra
"...the 40 years of low and declining interest can be summarized as “higher interest rates
rates were hugely beneficial for asset owners. for longer” as it continues its efforts to curb
Declining discount rates and the associated inflation. Having raised its target interest rate
reduction in the competitiveness of bond 11 times since March of 2022, the Fed will
returns led to substantial asset appreciation. likely remain in a data-dependent posture
Thus, asset ownership—whether related to going forward as it navigates the economic
companies, pieces of companies (equities), or climate in the months ahead.
properties—was the place to be."

Mark concludes that interest rates will see a long- Tom Palmer is the managing partner with Claremont
term reset (“sea change”) at the current levels. Capital (the Arizona School Risk Retention Trust, Inc.
investment management firm).
The idea that ultralow interest rates in the
13-year period from early 2009 to early 2022

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28 THE EDGE WINTER 2024