Powell’s Last Stand | Danielle DiMartino Booth on May Fed Meeting 2024
Forward Guidance
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Private Credit and the Challenges Ahead
Private credit currently faces the challenge of transitioning from the easy phase of lending money to the complex phase of retrieving it. The ongoing boom in private credit deals involves refinancing loans from high yield companies, which could lead to future financial risks. Companies rushing to restructure are making it difficult for private equity investors to maintain optimistic valuations. The potential delay in rate hikes or minimal rate cuts may exacerbate the restructuring wave and bankruptcy announcements. A competition between conventional bankers and bankruptcy attorneys is noticeable in the current private credit landscape.
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