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Brian Hoonjong Paik
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2023-04-15 14:37:17

Brian Hoonjong Paik on Nostr: In 2021, private equity firms actively used leveraged buyouts (LBOs) to invest in ...

In 2021, private equity firms actively used leveraged buyouts (LBOs) to invest in large F&B corporations. Now, due to rising interest rates, these acquired companies face financial challenges.

Most loans have floating interest rates, which fluctuate based on the rates set by the Federal Reserve. As the Fed raises rates to combat inflation, private equity firms worry about the declining value of their investments and pressure management to increase product prices.

This, in turn, makes food and groceries more expensive, worsening inflation instead of easing it. The Fed's monetary decisions often lead to unintended consequences. Is it wise to let a single agency continue making such impactful decisions?🤷‍♂️

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