2021 U.S. Loan Market Survey

Finally, there is light at the end of the tunnel. Respondents to our 2021 U.S. Loan Market Survey definitively see us having turned the corner on the — hopefully — once in a lifetime events of 2020. They expressed an expectation that recent market strength largely continues through 2021, spurred on by an accommodative Federal Reserve.

Nonetheless, concern about the longevity and depth of the recovery exists, as does worry that the market may be overestimating improvements at the weaker end of the credit spectrum. Furthermore, many respondents indicate that measures taken by the Federal Reserve and Congress to address the economic impact of the COVID-19 crisis have only provided temporary relief, deferred bad outcomes and potentially created new concerns beyond 2021.

Our respondents proved prescient in last year’s survey (conducted in February 2020) — a majority indicated that COVID-19 was either a significant event that markets were underappreciating or an event capable of triggering a recession. How right they were. In our latest survey, respondents recognize that the conditions for a U.S. recovery are in place, yet most don’t share the unabashed enthusiasm of financial markets regarding expectations for 2021, and many are concerned about inflation.