Eurodollar University WTF Just Happened In Credit Markets
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Feb 2, 2026 Steve Van Metre, market practitioner and credit-market commentator, gives a concise take on leveraged loans, private credit, and rising credit-cycle risks. He highlights January’s selling, buyer pullback, and hidden stress in payment-in-kind and extend-and-pretend mechanics. Short, sharp conversation connecting credit cracks to wider risk aversion and market downgrades.
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Leveraged Loans Signal Rising Caution
- Leveraged loan prices turned decisively lower in January 2026, signaling rising economic caution.
- This move corroborates weakness seen in private credit and the yield curve rather than a booming 2026 narrative.
Price Drops Reflect Credit, Not Rates
- Declining leveraged loan values reflect credit risk concerns, not interest-rate moves.
- Banks and underwriters are growing reluctant to take on more exposure amid rising default risk.
Buyer Strike Amplifies Market Moves
- A buyer strike by institutional investors can amplify price declines when they pull back.
- Many middle-market firms are postponing debt issuances because they don't see enough buyers.