Credit Currents

Tracking the forces shaping credit markets — and the signals investors should watch next.

Progress, with pressure points

July 16, 2026 | Dominique Bly

The macro backdrop remains broadly supportive, with growth expectations still positive as some headwinds have eased. But persistent inflation is keeping policy rates and borrowing costs elevated.

In our latest Credit Currents Quarterly, we examine how this backdrop is shaping liquid and private credit. Across both markets, income continues to support returns.

Beneath the surface, however, dispersion is increasing. Software borrowers remain under strain, AI-related issuance is testing demand, and private credit outcomes are diverging across vintages. The opportunity remains attractive, but disciplined underwriting, manager selection, and portfolio construction are becoming more important.

Additional perspectives on credit

Still a higher-for-longer income opportunity

Renewed inflation pressure is reinforcing a more hawkish central bank backdrop and, in turn, a continuation of the higher-for-longer rate environment. This continues to support income in floating-rate credit.

Exploring the durability of private credit returns

As markets move toward a more normal credit cycle, the private credit story is still broadly constructive – but the market is becoming less uniform.

All hands on deck: Financing the AI buildout

As investment grows, AI financing has increasingly converged with infrastructure and project finance markets, expanding the opportunity set and reshaping how credit investors assess and underwrite risk.

Tracking default activity across credit markets (part I)

As defaults remain elevated across liquid credit markets, investor outcomes are increasingly shaped by recoveries, security selection, and how stress is being worked through the credit cycle.

Tracking default activity across credit markets (part II)

As borrower performance become more dispersed, underwriting discipline, portfolio construction, and workout expertise are likely to play a larger role in shaping recoveries, realized losses, and ultimately investor return.

Examining M&A activity and why it matters for credit

Amid resilient M&A activity, shifting deal dynamics and evolving private equity behaviour are reshaping financing demand across credit markets.

Private credit’s growth through an insurance lens

A closer look at what draws insurers deeper into private credit — and where the real boundaries may lie.

Learn more

Putting Private Credit Concerns in Perspective

An examination of whether the market’s loudest concerns point to broader stress — or a more selective story beneath the surface.

Learn more

Q2 2026 - Uneven resilience

Markets are now navigating a more complex risk environment. Geopolitical developments add another layer of uncertainty, but the extent of impacts is still unknown.

Q1 2026 - Dispersion, not disruption

With peak macro headwinds likely behind us, the focus shifts from broad disruption to sharper differentiation. In this environment, income still stands out — but so does the need to be selective.

Q4 2025 — Still climbing the ‘wall of worry’

A closer look at the questions building beneath a still-resilient market backdrop.

Q3 2025 — Two-sided risks

An exploration of the tension between opportunity and caution as risk broadens out.

Q2 2025 — Crosscurrents

A closer read on the competing signals shaping credit beneath an unsettled backdrop.

1H 2026 Private Credit Chartbook

A visual deep dive into key trends shaping private credit markets.

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