Inflection points are often apparent only in hindsight. While it’s premature to call a top to the current rate and inflation cycle, signs are evident that change is underway.

Last week’s Fed rate hike of 25 bps, a deceleration from its previous three monthly moves, is a case in point. At 4.50-4.75% we are within a hike or two away from the 5%-ish terminal rate at which the market expects the Fed to level off for a wait-and-see.

The questions are how long will they wait, and what will they see? Last Friday’s job report may have given them pause. Is the economy still in need of a smack down, or will the labor market settle down as other inflation indicators seem to have done?...

“Your heart says ‘I think this is going to be OK’ but your head says ‘I know these guys are playing for keeps’.” – Jonathan Hausman, senior managing director, global investment strategy, Ontario Teachers’ Pension Plan.

Featuring Charts

Chart of the Week: Healing Time

February 7, 2023

Secondary BSL bids are edging up in concert with optimism in public equities.

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Chart of the Week: Hire Plateaus

February 1, 2023

Small and mid-sized businesses generate most of US job creation.

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Chart of the Week: Ceiling Whacks

January 24, 2023

Past government disputes on debt ceiling limits have sent market volatility soaring.

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Chart of the Week: Rate Expectations

January 17, 2023

Despite the Fed’s hawkish jawboning, market rate expectations show little increase.

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Chart of the Week: Inflation Allocation

January 10, 2023

As prices edge down from mid-2022 highs, shelter and services remain under pressure.

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Chart of the Week: Private Practice

December 20, 2022

Since March the Fed has increased its rate target by 4.25%, the fastest climb ever.

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Features

Private Debt Intelligence – 2/6/2023

Industrials lead private debt deals in North America A month into 2023, industrials are the dominant sector among private debt deals in North America with 10 deals out of 36 deals in total (28%), a three-deal lead over consumer discretionary. Activity in the sector is consistent with previous years, as industrials deal numbers generally occupy…

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PDI Picks – 2/6/2023

Direct lending stays in favour with LPs With few signs of trouble emerging the strategy is still going strong, but for distress the outlook is more mixed. Direct lending strategies remain top of the shopping list for investors in private debt, with 47 percent of LPs planning to invest more in those strategies during 2023…

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The Pulse of Private Equity – 1/30/2023

A big drop for small funds Download PitchBook’s Report here. Another 193 middle-market funds closed last year, according to PitchBook’s latest US PE Breakdown. Collectively the funds are worth $161.5 billion—both figures being in line with prior years. But fundraising at the smallest end of the market didn’t fare as well. Among funds of $200 million…

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Private Debt Intelligence – 1/30/2023

Direct lending tops North America fundraising in 2022 As expected, North America was the most sought-after region for private debt in 2022, with $135.2bn raised by funds focused on that market. This is more than double Europe’s $62.1bn and over 12 times Asia’s $11.2bn…. Login to Read More...

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Leveraged Loan Insight & Analysis – 1/30/2023

US LBO loan vol. (US$bn) and direct lending share of total Last year, when heightened volatility caused US syndicated LBO loan volume to retrench, the private credit space helped soak up some of the demand. US direct lending LBO volume totaled US$92.8bn in 2022, comprising a 45% share of overall US LBO loan volume, an…

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Beginning in July 2022 The Lead Left published a series of articles on credit market. This report consolidates those articles.

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