Howard Marks Warns of Fed's Influence on Investment Risks

According to Odaily, Howard Marks, co-founder of Oaktree Capital Management, has cautioned that the Federal Reserve's intervention in funding costs could drive investors towards higher-risk investments amid a slowing return environment. Marks expressed skepticism about the necessity for interest rates to be significantly lower than their current levels. He stated, "I believe the Federal Reserve should remain passive most of the time, intervening only when the economy is severely overheating, heading towards rampant inflation, or in a deep slump unable to create jobs. I do not think the current situation warrants such action." Earlier this week, Marks wrote in a blog post about his concerns regarding the impact of artificial intelligence on employment. He also questioned the practice of large-scale enterprises issuing substantial debt at low yields to finance AI deployment, despite uncertain demand for AI.