Peter Orszag on CNBC's Squawk on the Street

November 06, 2023


On November 6, Peter Orszag, Chief Executive Officer of Lazard, appeared on CNBC's "Squawk on the Street," to discuss the current state of the M&A market and the outlook for the fiscal trajectory of the United States.

Host Sara Eisen asked Peter whether the M&A market can expect a sustained pick up in transaction activity without some degree of certainty that interest rates have stabilized at their current level. 

"It's important for rates to stabilize - the level [of rates] also matters, but probably less than the degree of volatility. There has been some volatility in the U.S. Treasury market and [the U.S.] fiscal outlook is worse with higher rates than with lower rates," said Peter.

"It had been the new 'in' thing to focus on a new metric - net interest as a share of the economy - as an indicator as to whether we are on a stable path. When interest rates can move as quickly as they have, it illustrates that this indicator is probably not reliable as to whether we need to make some adjustments or not," he added.  

Peter concluded by sharing his perspective on whether U.S. funding issues will serve as a driver to keep pressure on interest rates to remain elevated. 

"I think there is a substantial risk of that. If you look at the pressures that the [U.S.] budget will be under - not only the demographic trends, but also the need for probable additional defense spending given geopolitical risks, and also the necessary spending associated with the energy transition - you can see upward pressure on government spending for the foreseeable future. And frankly, there is probably an inadequate revenue base to match that, so there will be plenty of supply coming onto the Treasury market, which tends to raise rates," he observed.  

Click here to watch Peter's segment in full