Easy Money
The Memo by Howard Marks
Effects of Easy Money and Low Interest Rates on the Economy
Easy money and low interest rates benefit automakers, suppliers, and workers, stimulating economic growth. However, they can lead to accelerated inflation and necessitate rate hikes, impeding economic activity. Low interest rates diminish opportunity costs, making investments more appealing. Additionally, low rates inflate asset prices by reducing the discount on future cash flows, pushing investors towards riskier assets for relatively higher returns.
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