GoldenTree Asset Management founder Steve Tananbaum warned that private credit profits face mounting risks, citing tighter lending standards and a potential economic slowdown. Speaking at Bloomberg Surveillance in Davos, he also flagged inflation risks as a key concern for the U.S. economy, suggesting investors should brace for volatility in the year ahead.

The comments come as the private credit market has swelled to over $1.5 trillion in assets, attracting investors with high yields but also raising questions about debt quality. Tananbaum’s perspective, from a firm with over $50 billion in assets, signals caution for an asset class that has boomed since the 2008 financial crisis.

Investors will watch how central bank policies, particularly from the Federal Reserve, influence both inflation and credit conditions. Tananbaum’s warnings suggest a shift from the aggressive lending that defined recent years, potentially altering deal flow and returns for the asset class heading into 2026.