Joseph Calandro Jr. on Riding U.S. Credit Cycle Waves

Featured Events | Oct 03, 2023 | Gabelli School of Business

Historically, the U.S. cycle of credit is defined by eras of high interest rates, inflation, and rapid business growth followed by periods of decline. The soaring rise of interest rates in the 1970s and 1980s pushed the market rate up to levels that hadn’t been seen before in modern history. The early 2020s have delivered similarly record-breaking numbers—but in the opposite direction.

In this webinar co-sponsored by the Gabelli Center for Global Security Analysis, Museum of American Finance, and CFA Society New York, Joseph Calandro Jr., a managing director of the global consulting firm PwC, suggested that the current waves of steadily increasing inflation and interest rates will offer strategic risks and opportunities for business investors, executives, and employees. He offered suggestions on how to navigate them to achieve profitability.

The state of society, politics, and the key players of the finance world are the main drivers for highs and lows in the cycle, according to Calandro, who is a fellow of the Gabelli Center for Global Security Analysis. What’s more, even with governmental regulation, the fluctuation of the economy can throw off the cycle’s balance.

“The economy is not a machine that can be managed on a timely and efficient basis and in which solutions can be readily engineered. It’s a collection of people buying and selling, and people can be fickle,” he said. “As a result, there can be and often are long and volatile times between the enactment of governmental and monetary policies and sustained cyclical effects.”