In conjunction with the 25bps interest rate hike in September,
the Fed, taking a hawkish stance on monetary policy, raised its
economic outlook and dropped the "accommodative" language
that has long been a component of its formal statement.
In August, the Bank of England (BOE) raised interest rates, citing
a strong labor market and credit growth. UK economic growth
rebounded in the second quarter following a slowdown in the first
quarter, which the BOE attributes largely to weather. One of the
most significant risk to economic growth remains Brexit
negotiations between the UK and European Union.
Private debt and equity dry powder continued to build, supporting
higher leveraged buyout (LBO) purchase multiples and lower credit
spreads. This trend may continue to result in private credit funds
and direct lenders gaining market share from banks - despite
loosening regulations.
