The Monthly Review: N.9 2025

The commentary analyzes the recent turmoil in the U.S. private credit sector and the sharp decline in regional banks, followed by a swift market rebound. The author highlights the return of volatility, fueled in part by Donald Trump’s political maneuvers against China. Although the Fed is attempting to drain excess liquidity, it may revert to expansionary policies in response to credit tensions. However, this ongoing postponement of the inevitable could increase future market risks, making proper portfolio diversification essential.