Spotting the Winners in a Rigged Game
Let's be brutally honest. Politicians, regardless of their party, absolutely love low interest rates. Cheap money means happy homeowners, booming businesses, and, most importantly, cheerful voters come election time. The Fed has always been the stern headmaster spoiling the fun, taking away the punch bowl just as the party gets going. But what happens when the headmaster is distracted, looking over his shoulder at investigators? He might just let the party carry on a bit longer.
This creates an artificially cheap money environment, and certain businesses are practically designed to thrive in it. Think of the mortgage lenders, like Rocket Companies, who see their business explode when people rush to refinance or buy new homes with cheap loans. Or consider the high-flying technology outfits, often bundled in trusts like BlackRock’s Science & Technology fund. Their entire model is built on borrowing money today to fund growth that might pay off years from now. When capital is cheap, that model works beautifully.