Justin Muzinich on navigating the ever-evolving worlds of US monetary policy and credit markets

This interview was filmed on 30 October 2025.

There's a sense that all aspects of the financial world have been in overdrive the last few years, and few have been better placed to analyse how things are moving than Justin Muzinich.

As Deputy Secretary of the Treasury from 2018 until 2021, Muzinich is more than well-versed in the ongoing struggle with post-Covid inflation and how global monetary and trade policy has changed in recent years. 

As CEO of Muzinich & Co, a privately-owned investment firm founded by his father in 1988, he's also on the ground in what is now a rapidly-evolving credit market. 

In this interview, Muzinich lays out the complex landscape facing the US Federal Reserve right now and where Muzinich & Co are seeing opportunities in the public and private credit markets.

The Fed's sticky situation

"The Fed is trying to figure out a number of difficult questions," says Muzinich. While inflation is relatively under control, it remains high by recent historical standards. Yet that hasn't stopped many demanding rate cuts.

But despite inflation and rates often dominating the headlines, the Fed actually has a dual mandate: low and stable inflation and maximum employment. 

With weakening employment numbers, the Fed finds itself stuck between a rock and a hard place, a position exacerbated by wider economic and market developments.

The tariff trade-off

The Trump administration hasn't been shy about its attempts to reshore industry to the US through aggressive tariffs and trade policy. But one potential casualty could be the US dollar's role as global reserve currency. 

But Muzinich believes the current administration could be attempting to thread the needle on preserving the dollar's status while also bringing industry back to the US. The key, he says, is targeting critical industries. 

"A large part of it is what we call in the US economic security, that is, not being dependent on countries you don't trust in your own supply chain," says Muzinich. 

"So I think one way to maintain the dollar's role in the world while also being sensitive to economic security is to really differentiate between national security-related industries. For instance, anything related to defence, AI, quantum [computing]."

He also points to the recent critical minerals deal signed between the US and Australia as another way for the US to maintain its global position. 

The advantages of private credit

While many investors are used to the accessibility and liquidity of public markets, the relative lack of liquidity in private markets can actually benefit investors. 

"What's fundamentally appealing about it is you earn an illiquidity premium," says Muzinich. "That illiquidity premium has historically only been available really to institutional investors, and, more and more, that's being made accessible to non-institutional investors."

That illiquidity also means investors can avoid much of the volatility inherent to public markets. "You don't have this mark-to-market volatility, which is really, really appealing," says Muzinich. "If you invest in public credit, you don't sleep as well at night because every day markets go up and down."

But the changing landscape in private credit isn't without its drawbacks. "The asset class has evolved a lot over the years," Muzinich said. "In certain parts of private credit, I think there's too much capital."

It's meant firms like Muzinich & Co have had to be more discerning in where they're investing. 

As competition grows and credit spreads tighten in private markets, there's a tendency for investors to chase the best yields without understanding the risk.