If he were that kind of hands-on manager, this mess might not have happened in the first place.
The real risk-free rate is 4%. 1. The real risk-free rate is 4%. Inflation is expected to be 3% this year and 5% during the next 2 years. Assume that the maturity risk premium is zero.
Suppose the fixed interest rate on a loan is 5.75% and the rate of inflation is expected to be 4.25%. Lenders lose from a lower real interest rate. Borrowers gain from a lower real interest rate.