Sea Change in Financial Markets

Howard Marks discusses the fundamental shift termed 'sea change' in financial markets due to the significant and long-lasting changes influenced by highly accommodative monetary policy. Marks highlights the profound impact of declining interest rates on the economy, business profitability, asset values, cost of capital, and default rates. The prolonged period of declining rates has majorly benefited investors, stimulating economic growth and reducing borrowing costs, but this favorable era is believed to have come to an end with inflation concerns and rising interest rates.