Federal Shutdown Reaches Third Week as Resolution Remains Elusive
Harvey Schwartz, CEO of the Carlyle Group, has raised concerns about credit during the current late economic cycle. In an interview with Bloomberg News, he emphasized the potential risks credit markets face as they approach this stage. However, he also noted that there remains a degree of resilience in the market.
Credit Market Concerns
Schwartz, who describes himself as the “chief worry officer” of Carlyle, highlighted that any news could disrupt markets. He stated, “Any time you’re very late cycle like this, any news item could be disruptive to a market on any given day.”
Systemic Risks and Market Stability
Despite these concerns, Schwartz pointed out that a recession-driven credit cycle has not occurred for many years. This extended period of stability has led to justified worries about credit underperformance. Nonetheless, he believes that a systemic collapse is unlikely.
- Concerns over credit performance during late economic cycles.
- Increased market volatility impacting bank stocks.
- Specific worries linked to regional banks and their exposures.
- Recent bankruptcies in the auto industry raising questions.
Bank stocks have seen increased volatility recently, primarily due to fears regarding regional banks’ exposure to credit risks, particularly linked to two bankrupt auto-industry firms. These developments illustrate the uncertain environment as the federal shutdown reaches its third week with no resolution in sight.
Conclusion
The ongoing federal shutdown and its impact on the economy highlight the complex challenges facing credit markets today. As companies navigate this turbulent landscape, the insights from industry leaders like Harvey Schwartz become increasingly valuable.
