• The Federal Reserve (the “Fed”) considers two main factors when making decisions regarding interest rates: the first is inflation, which remains high, and the second is unemployment, where we are seeing a slowdown in employment. Notably, the employment data for June was revised downward, reaching its lowest levels in five years.

• Cutting interest rates will not affect collateralized loan obligations (CLOs) unless there is a default on the payments. However, in other types of private debt, a reduction in interest rates results in a decrease in their returns.

• At The Family Office, we expect the Fed to reduce interest rates by 0.25% in September, and that no significant cuts will follow until the end of the year, before inflation begins to sharply decline.

Watch the full interview above.