Fed Probes $1.3tn Private Credit Market Amid Rapid Growth

The Federal Reserve Banks of Dallas and New York have announced plans to explore lending trends in the US private credit market, which has grown rapidly over recent years. The $1.3tn market is largely under-regulated compared to public credit markets, leading to limited visibility on lending activity.

To address this knowledge gap, both banks will conduct a pilot survey of the direct lending market. This will involve segmenting borrowers by size: upper middle market (> $100m EBITDA), middle market ($30m-$100m EBITDA) and lower middle market (<$30m EBITDA).

The survey aims to gather insights into credit availability, provision, and the evolution of lending standards in private credit markets. The findings will inform broader economic and monetary policy considerations.