Blackstone forecasts….

Blackstone CFO Michael Chae sees inflation trending down and economic resilience. However, he also highlights the challenges of the cost of capital and the availability of capital, which are affected by factors like short rates, quantitative tightening ($1T annually), and credit contraction. As a result, Blackstone expects the Fed to deliver a slowdown to the economy. In terms of deal-making, they mention that M&A activity froze during the rate shock period but is now thawing as uncertainty decreases and prices stabilize in the next year or two. They also discuss the investment opportunities in the credit and equity sectors, particularly in lending money and private credit where risk-reward ratios are favorable. When it comes to real estate, Chae acknowledges the challenges faced by the traditional office sector but points out the strong performance in sectors like logistics, data centers, and rental housing.