Will a rate cut(s) save distressed investments?
Cuts are approaching, but will they actually help?
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Will a rate cut(s) save distressed investments?
Happy Thursday! 👋
All major headlines seem to be pointing to an upcoming rate cut, which begs the question - will it really help existing investments in distress? My goal today is answer this.
For some background, here’s the front page of the WSJ yesterday:
You can also see below that, from a betting market perspective, investors seem to be pricing in a cut with 95% probability.
While everyone seems to agree that it’ll happen and the argument is around how much (25 vs 50 bps, i.e. 0.25% vs 0.50%), does the change cause the relief many LPs need?