(Bloomberg) -- Credit markets broadly look appealing to Bruce Richards, chief executive officer of Marathon Asset Management, as the Federal Reserve cuts interest rates.
“Buy all credit,” Richards said on Bloomberg Television on Thursday, citing signs that the US economy is still relatively strong, including gross domestic product growth of 3%, annualized, in the second quarter.
On top of that, with the Fed cutting rates, yields are lower in money market funds, and giving investors an incentive to move money into higher-yielding assets including credit, Richards said.
Lower rates will boost earnings for companies with higher debt loads, by cutting their borrowing costs, he said. Cheaper financing will also allow more buyouts, which can help create opportunites in private credit lending as well.
“Our direct lending team — never been busier,” Richards said. “But what’s coming is prolific.”
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