Analysis: A stocks rout became a bonds rout. Is private credit next?
The question with any financial shock isn’t the point of impact. It’s the blast radius.
The 2008 crisis began in subprime mortgages, but the wonders of securitization spread it everywhere. The dot-com crash was fairly self-contained. When Thailand unpegged its currency in 1997, we got the Asian financial crisis. When Switzerland did the same in 2015, the drama lasted just a few days.
President Donald Trump’s tariff shock moved from the stock market to the bond market. The question now is whether it stays there.
A chief concern is private credit, the catch-all term for lending that happens at investment firms instead of banks. They hold $1 trillion more in loans than they did in 2016, and lent a lot of that money in the frothy days…
