The Pandemic Era of Dirt Cheap Credit is Ending as Fed Prepares to Hike
- Orders are shrinking, sales take longer across U.S. markets
- Demand for debt is still strong though, and yields remain low
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For much of the past two years, money managers were handing out credit to just about anyone that asked for it: Tech startups with no profit. Cruise companies struggling to navigate a pandemic. Retailers that rely on fading malls.
But in less than two months, the carefree days of ultra cheap credit have shown signs of coming to an end. Central banks around the world that pumped trillions of dollars into markets to keep economies afloat are now rushing to scale back the liquidity and fend off inflation. Those efforts could be hastened after U.S. Labor Department data on Thursday showed higher-than-expected price increases in January.