Market turmoil continued last week, leading to considerable investor unease over impacts to the credit environment. Conviction on where we are in the credit cycle amongst the many market participants we interact with are low.

The data is mixed. Although the jobs data at the beginning of the month was strong, last week’s economic data – housing starts (down 2.5%), CPI (down .1%), retail sales ex-auto (down .1%), and the Philly Fed business survey (-3.5) was weak.  What we can say definitively, based on the Citi Economic Surprise Index, is that markets are re-pricing to macro data that is coming in below expectations.

Consequently, the implied probability of a Q1 Fed rate hike has dropped to 22%. International bodies including the IMF and the Bureau of International Settlements are encouraging the Fed take a cautious approach to rate hikes given the low level of inflation.

While we focus on macro articles this week, other major developments last week include the continuation of platform-led funds (see SoFi article) as platforms seek to create sources of semi-permanent capital, and Digital Asset Holding’s major fundraise.

Note that Ram will be in SF for the China Credit Conference giving a talk on “Securitization: Opportunity for Marketplace Lenders.” Drop a note if you’d like to catch up!

Industry Update: