Howard Marks：The Role of Confidence, Excerpt 3

What will happen when it no longer does? Will rates rise? How much? Will the effect of higher rates on the cost of financing purchases and investments be enough to slow the economy? And what will be the impact of higher rates on the government’s cost of financing, and thus on the deficit? What are the implications of the fact that the Fed’s balance sheet has swelled to over $3 trillion? How does the Fed pay for the bonds it buys under QE? Will it have to pay that money back? Will the Treasury have to pay off the Fed when the debt matures? Where will it get the money? And where will the money go? (Think about this for a minute: do you feel you understand the workings of this process?

Source： https://www.oaktreecapital.com/docs/default-source/memos/2013-08-05-the-role-of-confidence.pdf
Locator：Memo, excerpt 3 · Verified：2026-10-19 · Verification：Short excerpt

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