Bloomberg Talks Howard Marks Talks Interest Rate Cuts
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Dec 11, 2025 
Howard Marks, co-founder and co-chairman of Oaktree Capital Management, shares his insights on interest rates and market dynamics. He argues that rates don’t need significant cuts from current levels and explores the distinction between productive and unproductive bubbles, particularly highlighting AI as a transformative force. Marks also discusses investment strategies during speculative periods and warns about the risks of a 'Fed put' mentality. Additionally, he expresses concerns about AI’s potential to displace jobs and diminish societal purpose.
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Productive Vs. Unproductive Bubbles
- Technological bubbles can be productive by pushing society forward even if their implementation is excessive.
- AI likely belongs to this category, bringing irreversible change despite possible overinvestment.
Prefer Equity For Highly Uncertain Bets
- Avoid lending to ventures whose outcomes are purely conjectural because lenders get fixed returns and bear downside.
- If you want exposure to highly uncertain startups, take equity to capture upside instead of extending debt.
Debt Requires Repayment Visibility
- Lenders need clear visibility that borrowers can repay interest and principal.
- Debt with limited upside and high failure probability is a poor risk-reward trade.