Weekly Global Economic Update | Deloitte Insights
Week of April 13, 2026
Deloitte’s team of economists provides their latest analysis on key global economic developments. This week’s spotlight focuses on the rapid growth of private credit in the United States and its potential implications, along with notable shifts in inflation, consumer confidence, and ongoing COVID-19 disruptions worldwide.
What’s All the Fuss About Private Credit?
Private credit has become a hot topic among economists, policymakers, and financial leaders due to its extraordinary expansion in recent years and concerns about systemic risk it may pose to the financial system.
Defining Private Credit
The US Federal Reserve describes private credit as debt-like, non-publicly traded financial instruments offered by nonbank entities such as private credit funds and business development companies. Unlike traditional banks, these firms operate outside stringent banking regulations, capital requirements, and disclosure obligations, leading to relatively opaque market conditions.
Market Size and Growth
Since 2000, the private credit market in the U.S. has ballooned from a mere $46 billion to an estimated $1.4 to $1.8 trillion in 2026. This meteoric rise reflects investor demand for flexible, fast financing solutions unavailable through more regulated banking channels.
Private credit companies raise capital from institutional investors including pension funds, insurance firms, private equity, sovereign wealth funds, and family offices. They often supplement this capital by borrowing from banks, which further complicates the risk profile.
Financial Stability Board data highlights that about half of global financial assets now reside with nonbank intermediaries, with private credit representing a rapidly growing segment. Over the past eight years, US bank lending has increased by roughly 25%, while private credit lending surged over 130%.
Drivers Behind the Rise
Post-2008 financial crisis reforms significantly tightened bank capital and lending standards to mitigate systemic risk exposed during the crisis’s fallout on bank exposures to nonbank investment vehicles. However, these regulations incentivized borrowers and investors to seek alternative lending solutions outside the traditional banking system, leading to the expansion of private credit markets.
Risks and Systemic Implications
Concerns regarding private credit stem from its potential to exacerbate financial instability under stress, especially in scenarios involving mismatches between liquid liabilities and illiquid assets — a classic cause of financial crises as noted by economist Paul Krugman.
In such situations, rapid withdrawals or loan recalls can force lenders to sell assets at depressed prices, triggering a downward spiral of bankruptcies and losses.
Is Private Credit a Systemic Threat?
Assessing systemic risk from private credit is complex:
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The private credit market relative to U.S. GDP remains smaller than the broader nonbank securities markets implicated in the 2008 crisis.
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Many private credit funds have liquidity management mechanisms, such as restrictions on investor redemptions, which could mitigate sudden cash outflows.
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However, the interconnectedness through bank borrowing raises the potential for liquidity stress transferring to the banking sector. A Federal Reserve Bank of Boston study warns that large-scale drawdowns of bank credit lines by private credit lenders could strain bank liquidity during adverse conditions.
Other Key Economic Highlights
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US Inflation and Consumer Confidence: Inflation in the United States has surprisingly accelerated this week. Concurrently, consumer confidence has taken a sharp decline, signaling potential headwinds for consumer spending and economic growth prospects.
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China’s Pricing Trends: Chinese consumer prices have so far remained stable without major impact from prevailing crises. Yet, producer prices in China are showing signs of acceleration, which could influence supply chain costs and inflation dynamics domestically and globally.
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Ongoing COVID-19 Impacts: The pandemic continues to disrupt the global economy, affecting supply chains, labor markets, and overall economic activity with varying intensities across regions.
About the Author
Ira Kalish
Chief Global Economist, Managing Director, Research & Insights, Deloitte Services LP (United States)
Email: [email protected] | Phone: +1 310 420 0392
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Summary: The explosive growth of private credit in the U.S. poses interesting questions about financial stability and regulatory oversight. While private credit offers agility and tailored financing unheard of in traditional banking, its increasing scale and reliance on bank lending introduce potential vulnerabilities. Monitoring this sector alongside inflationary trends, consumer sentiment shifts, and ongoing global disruptions remains critical for understanding the evolving economic landscape in 2026.