Marc Rowan, chief executive of Apollo Global Management Inc., said he sees no reason for the Federal Reserve to keep cutting interest rates to stimulate the economy.

“Funding is still active. Property prices are rising,” Rowan said in an interview with Bloomberg TV on Wednesday. “It’s not clear that we need to cut rates further.”

Fed officials last month cut interest rates by 50 basis points for the first time in four years, and this week, Fed Chairman Jerome Powell indicated that rate cuts will continue, but the pace may slow.

In an interview a day after Apollo's triennial investor day, Rowan raised concerns that the Federal Reserve may be overstimulating the economy.

“To the extent that we accelerate economic growth to the point where we have to go in the other direction, that’s not going to be an easy life,” he said.

Apollo revealed ambitious goals at its investor day on Tuesday, aiming to grow assets under management to $1.5 trillion and generate $10 billion in annual revenue within five years.

Rowan said Wednesday that Apollo may form partnerships with more banks, similar to its deal with Citigroup Inc. to pursue private credit investments. He said the company could potentially form international, investment-grade and infrastructure-related partnerships.

The CEO said the difference between public and private investment-grade debt is continuing to narrow, especially as credit rating agencies say they are of the same quality.

“In 18 months, I don’t believe investors will know the difference,” Rowan said. “Everything that exists in the public markets will be in the private markets.”

The advances will also extend to equity investing, he said. Investors are over-allocated to a few large-cap stocks, he said, and adding private investments to 401(k) portfolios could boost returns by 50% to 60%.

Rowan also sounded the alarm about the current pace of government spending, noting the US is "spending the next generation's money".

Article forwarded from: Jinshi Data