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"Key Takeaways From SFNet’s Asset-Based Capital Conference," published in the February 27, 2025, edition of The Secured Lender, includes a recap of the "Economic and Policy Update" panel moderated by Laura Jakubowski, Goldberg Kohn's Director of Knowledge Management and Innovation.
SFNet's Asset-Based Capital Conference was held in Las Vegas on February 11-12, 2025. It is the premier annual event for those in the middle-market leveraged finance and asset-based finance world. Attendees, including The Secured Lender article author Cheryl Mayo of Haversine Funding, walked away with up-to-date market insights from industry leaders.
An edited excerpt of Mayo's summary of the "Economic and Policy Update" panel discussion is below. Laura's fellow panelist included Seth Bloom, President, Bloom Strategic Counsel PLLC; Lon Goldstein, President, Goldstein Policy Solutions; and Michael Skordeles, Senior Vice President and Head of U.S. Economics, Truist Wealth.
Mayo's Summary of the "Economic and Policy Update" Panel Discussion
Beyond specific market trends, panelists shared insights into the broader economic and policy environment. The new selection of banking regulators aligns with traditional choices, mirroring prior administrations. We should expect interest rates to maintain an upward pressure, which would have happened regardless of who won the election. The U.S. economy continues to outperform Europe, with no indication this will change soon.
While political pressures persist on the Federal Reserve, economic data will guide policy decisions. All agreed that the concern about a government shutdown was valid and would cause disruption.
The panel went on to discuss the U.S. dollar and its stability, even with volatility. Because cryptocurrency lacks regulation and there is no way to tax it widely, adoption is unlikely until these issues are addressed, or a dollar-pegged coin emerges.
The panel also discussed tariffs. Tariffs are being employed as leverage in international negotiations. The impact varies depending on the trade partner. The example used was the difference between U.S. tariffs on Canada versus those on China and the results that transpired.
In addition to tariffs, the panelists discussed tax credits, noting that industries relying on tax credits are vulnerable to government policy changes. For example, the support needed for steel and iron could negatively impact agricultural exports, potentially requiring substantial subsidies.
Going forward, the key industries to watch include AI, healthcare and sustainable energy, though policy shifts could impact sustainable energy. Distressed areas include export-dependent industries and agricultural exports. More companies are shifting production away from China, with the U.S. holding demand-side leverage. Brazil faces economic vulnerabilities, while India emerges as a significant player in services and technology.
Mayo concludes that the discussion included insightful reminders, innovative ideas and detailed strategies for monitoring collateral to increase the likelihood of a successful workout or avoid unexpected over-advances. Understanding the recent changes in economic and policy shifts helps us prepare for their impact on our industry.
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Director of Knowledge Management and Innovation