Private credit performance during rising policy rates in the U.S. 2016-2023
During periods of rising policy rates, the performance of private credit investments appears to outperform other asset classes. During the latest Fed funds rates hikes between the end of 2021 and the second half of 2023, private credit investments returns were as high as 14 percent. Private credit investments usually feature floating interest rates. This can boost returns when interest rates rise, but may lower potential returns when rates fall.
