The three key areas that we are seeing on a macro perspective that are pushing things around are what I like to call the three Rs: rates, recession and regulation.
When I’m saying rates, I am not talking about which direction they’re going in. I’m talking about the volatility in rates, which is undeniable.
The risk-free asset is the most volatile asset that we’ve seen in the last 12 to 24 months. That volatility is creating space for us by changing funding markets and allowing us to operate in places where we couldn’t have before.
When I talk about the second R, or recession, we’re not making a prediction, “Which way are we going?” But the fact that the economic cycles are in flux is also creating opportunity.
And when I talk about regulation, I’m talking about Basel and I’m talking about the Inflation Reduction Act. Undeniably, both of them are creating lots of opportunity for us.
This is the time for experience, not intuition.