Oaktree Capital's Max: The Federal Reserve is expected to cut interest rates, but rates are not expected to fall below 3%

According to the Zhitong Finance and Economics APP, Howard Marks of Oaktree Capital Management, LP, expects that after the Fed rate cut, US interest rates will stabilize between 3% and 4%.

The co-founder and co-chairman of Oaktree Capital made the remarks at a meeting in Melbourne on Thursday, stating, "The Fed will cut rates from the emergency levels of 5.25% and 5.5% to above 3%. But my view is that I believe rates will stay at 3%, not return to zero, 0.5%, or 1%."

Currently, the market generally expects the Fed to start a easing cycle this month. However, there is still a significant difference in opinions on the speed of rate cuts. Some rate traders expect policymakers to take more aggressive action, cutting rates by 50 basis points, while others expect Fed officials to cut rates by 25 basis points at the meeting on September 17th to 18th.

Marks' view is generally in line with the market's expectations for the extent of rate cuts. Futures traders expect the rate cuts to stop around 3%.

Marks stated that due to the "emergency" of inflation in recent years, the Fed was required to raise rates. He said, "I think the emergency is over."

He added, "Economic growth may slow down, profit margins may be eroded. In other words, I think we are returning to normal, but this normal is different from the situation of the past 40 years. This is the result. Normalcy in the economic and investment fields is a mix of good times and bad times."

According to Oaktree Capital's website, as of June 30th, the asset management company managed $193 billion in credit, private equity, real estate, and public equity strategies