Forward Guidance

The Era of Descending Capital Costs Planted Seeds for Tomorrow

Photographer: Matt Chase
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When the first issue of Bloomberg Markets appeared in July 1992, little did we know that we were entering three halcyon decades of the easiest credit since the 1950s and, most recently, the strongest growth in modern times.

The catalyst was the diminishing cost of capital, abetted by disinflation as China and the Pacific Rim became globalization’s primary source of cheap labor. Having raised borrowing costs to conquer inflation in the early ’80s, the Federal Reserve and other major central banks found themselves taking unprecedented measures to restore growth after the 2008 financial crisis and the onset of the coronavirus pandemic. Soaring demand for debt, equity, and money in all its forms created a 24-hour Wall Street bazaar of wealth such as the world had never seen.