“It is difficult for us to envision a scenario in which the leveraged loan market causes the next financial crisis.” – Beth MacLean, loan portfolio manager, PIMCO.

We aren’t often torn between which notable Quotes of the Week to feature. This issue, however, presented us with outstanding insights from two long-time credit practitioners. Let’s go first to Mr. Mikkelsen’s observation regarding Fed policy.

December proved to be a significant turning point in the way the Fed approached rate hikes. Prior to that, the FRB seemed to focus almost exclusively on economic data. Given its dual mandate of price stability and full employment, this made total sense.

But we live in a post-data world. The inflation threat has been chimerical. Higher interest costs, however, were real. So the market had a fit when Chairman Powell appeared to signal he was sticking to a three-ish number of hikes for 2019.