January 17, 2023, 11:00 a.m.

The credit cycle is turning, pointing to wider credit spreads, rising credit losses at banks, and rising equity volatility.

  • Credit has shot up the highest since the pandemic. But all good things must come to an end, and credit crunch often follows credit booms closely. Cracks are now emerging in credit markets as the strongest monetary policy tightening in decades begins to show.
  • Recent credit expansion has been widespread, from private and leveraged loans to corporate debt and bank loans. There was a brief setback as some of the fiscal support was extended to private lending…