Consumer Price Index

• Core consumer prices rose 0.3% in July, the largest increase in six months, driven partly by tariffs, while overall CPI rose 0.2% as falling gas prices offset some inflation
• Annual core inflation reached 3.1%, the highest since February, with rising service costs – especially housing, medical care, and airfare – posing the biggest concern
• Despite the inflation uptick, most investors still expect the Fed to cut interest rates in September due to a weakening labor market and expectations that tariff-driven inflation will be temporary

Producer Price Index

• U.S. wholesale prices surged 0.9% in July – the biggest jump in three years – driven by higher costs for food, metals, and services
• Core wholesale inflation rose 0.6%, the largest gain in over three years, with annual rates climbing to 3.3% overall and 2.8% for core
• Rising prices for raw materials up 1.8% and partly finished goods up 0.8% suggest inflation is building before products even reach store shelves

U.S. Retail Salesit

• U.S. retail sales rose 0.5% in July, with broad gains across 9 of 13 categories, led by motor vehicle sales and online promotions
• Excluding autos, retail sales still increased 0.3%, supported by strong performance at general merchandise and e-commerce stores, including Amazon and Walmart
• The increase suggests consumer spending picked up in the second half of the year as trade policy clarity and a rebounding stock market boosted confidence

U.S. Tariff & Trade‍

• President Trump said aboard Air Force One Friday that tariffs of 200–300% on imported chips and semiconductors could be announced as early as next week, alongside new duties on steel; no immediate White House clarification was provided
• President Trump issued an executive order Aug. 11 extending for 90 days the reduced reciprocal tariff on Chinese imports, citing China’s “significant steps” to address trade and security concerns
• Nvidia and AMD will remit 15% of China chip sales to the U.S. government in exchange for export licenses—the first use of export controls as a revenue-raising tool, with critics warning it resembles an export tax that may conflict with Article I, Section 9 of the Constitution
• US Census data show June imports from China fell to a 16-year low, while imports from Vietnam and Taiwan reached record highs—indicating supply chains are shifting or Chinese goods are being transshipped through those countries, a practice the U.S. has pledged to target

Jobless Claims

• Initial jobless claims, a measure of how many workers were laid off across the U.S., decreased to 224,000 in the week ended August 8, down 3,000 from the prior week.
• The four-week moving average was 221,750, up 750 from the prior week.
• Continuing claims – those filed by workers unemployed for longer than a week – decreased at at 1.953 million in the week ended August 1. This figure is reported with a one-week lag.

Fed’s Balance Sheet

• The Federal Reserves assets totaled $6.644 trillion in the week ended August 15, up $2.8 billion from the prior week.
• Treasury holdings totaled $4.205 trillion, up $0.3 billion from the prior week.
• Holdings of mortgage-backed securities (MBS) were $2.12 trillion in the week, down $2.0 billion from the prior week.

Total Public Debt

• Total public debt outstanding was $37.09 trillion as of August 15, an increase of 5.5% from the previous year.
• Debt held by the public was $29.74 trillion, and intragovernmental holdings were $7.39 trillion.

GDP

• The latest annualized U.S GDP stands at $30.33 trillion as of June 30, 2025 an increase of 1.23% from the previous quarter , & an increase of 4.53% from the previous year
• The total public debt-to-GDP ratio is at 119.39% as of June 30, a decrease of -0.65% from the previous year

Inflation Factors

CPI:

• The consumer-price index rose 2.7% in June year over year.
• On a monthly basis, the CPI increased 0.3% in June on a seasonally adjusted basis, after increasing 0.1% in May.
• The index for all items less food and energy (core CPI) rose 0.2% in June, after rising 0.1% in May.
• Core CPI increased 2.9% for the 12 months ending June.

Food & Beverages:

• The food at home index increased 2.4% in June from the same month a year earlier, and increased 0.3% in June month over month.
• The food away from home index increased 3.8% in June from the same month a year earlier, and increased 0.4% in June month over month.

Commodities:

• The energy commodities index increased 1.0% in June after decreasing (2.4%) in May.
• The energy commodities index fell (7.9%) over the last 12 months.
• The energy services index rose 2.9% in June after increasing 0.8% in May.
• The energy services index rose 7.5% over the last 12 months.
• The gasoline index fell (8.3%) over the last 12 months.
• The fuel oil index fell (4.7%) over the last 12 months.
• The index for electricity rose 5.8% over the last 12 months.
• The index for natural gas rose 14.2% over the last 12 months.

Supply Chain:

• Drewry’s composite World Container Index decreased to $2,423.87 per 40ft container for the week of August 8
• Drewry’s composite World Container Index has decreased by (56.3%) over the last 12 months.

Housing Market:

• The shelter index increased 0.2% in June after increasing 0.3% in May.
• The rent index increased 0.2% in  June after increasing 0.3% in May.
• The index for lodging away from home decreased (2.2%) in June after increasing 1.9% in May.

Federal Funds Rate

• The effective Federal Funds Rate is at 4.33% , flat 0.00% year to date.

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Middle East

• A U.N. human-rights commission found that pro-government forces in Syria committed systematic and widespread atrocities against Alawite civilians earlier this year, including murder, torture, and abductions
• The violence, which triggered revenge attacks and displaced tens of thousands, highlights ongoing risks to minority communities
• Israel plans to move ahead with a controversial settlement expansion in the E1 area near East Jerusalem, linking Ma’ale Adumim to the city and isolating Palestinian communities
• The expansion coincides with international recognition efforts and U.S.-Israeli support, complicating a two-state solution

Europe

• Ukraine and Russia have exchanged over 10,000 prisoners of war during the conflict, using a secret military intelligence channel
• The prisoner swaps, coordinated by senior intelligence officers and supported by neutral countries like Turkey and Saudi Arabia, demonstrate rare cooperation between two wartime enemies despite stalled peace talks
• President Trump and European leaders agreed on key “red lines” ahead of his Alaska summit with Vladimir Putin, stressing a cease-fire, Ukraine’s participation, and no territorial negotiations without Kyiv
• The agreement sets the stage for a potential trilateral meeting with Putin and Zelensky, aiming to secure a coordinated U.S.-European approach to end the war in Ukraine

China

• China’s economy showed signs of broad-based slowing in July, as both retail sales and industrial production growth decelerated, raising pressure on Beijing to boost growth
• Industrial production rose 5.7% year-over-year in July, down from June’s 6.6% increase, highlighting a cooling trend in the country’s manufacturing sector
• U.S. reliance on Chinese goods has fallen sharply since 2018, with China now accounting for only about 12% of all U.S. imports, down from a peak of 22%
• The U.S. trade deficit with China has also declined to around $280 billion, compared with $418 billion at its peak in December 2018

Sudan

• Sudan’s famine has escalated as over two-thirds of the population faces severe hunger, with fertile farmlands rendered unusable due to ongoing conflicts, heavy rains, and blocked aid routes, while the Rapid Support Forces – a powerful paramilitary group linked to the Janjaweed militias – intensify attacks on displacement camps, complicating humanitarian efforts

UK

• The Bank of England lowered its key interest rate from 4.25% to 4%—the fifth cut in a year—after a closely split vote, aiming to balance a recent uptick in inflation with signs of a weakening jobs market, while signaling future cuts may proceed more cautiously

India

• Despite new U.S. tariffs doubling to 50% on Indian exports over its Russian oil purchases, Prime Minister Modi is resisting pressure from President Trump to cut ties with Moscow, citing decades of strategic, economic, and military cooperation that have brought discounted crude, arms technology transfers, and geopolitical support

Mexico

• Mexico and the U.S. are negotiating a new security agreement alongside broader trade talks, but President Claudia Sheinbaum’s efforts are being complicated by entrenched cartel influence, which threatens both cross-border cooperation and the stability needed to finalize a comprehensive deal with Washington

Europe

• In a shift under President Trump’s policy, four European countries—led by the Netherlands and a Denmark-Sweden-Norway consortium—are buying about $1 billion in U.S. arms, including Patriot missiles, for Ukraine through NATO, with Trump pushing allies to fund Kyiv’s defense while the U.S. focuses on China and the Pacific

Brazil

• Brazil’s Supreme Court ordered former President Jair Bolsonaro under house arrest, accusing him of violating a social-media ban while facing trial for allegedly plotting a 2022 military coup to block President Luiz Inácio Lula da Silva from taking office

North Korea

• Satellite imagery shows North Korea expanding its Sohae Satellite Launching Station with a new seaport to receive large rocket components from Russia, reflecting deepening military cooperation that includes Russian aid in developing spy satellites—technology that could dramatically improve Pyongyang’s reconnaissance and missile targeting capabilities

Oil Prices

• WTI: $62.80 per barrel
  
• (1.69%) WoW; (6.12%) YTD; (18.42%) YoY
• Brent: $65.85 per barrel
  
• (1.11%) WoW; (6.66%) YTD; (17.44%) YoY

US Production

• U.S. oil production amounted to 13.3 million bpd for the week ended August 8, up 0.0 million
  bpd from the prior week.

Rig Count

• The total number of oil rigs amounted to 539, down 0 from last week.

Inventories

Crude Oil

• Total U.S. crude oil inventories now amount to 426.7 million barrels, up 0.2% YoY.
• Refiners operated at a capacity utilization rate of 96.4% for the week, down from 96.9%
  in the prior week.
• U.S. crude oil imports now amount to 5.962 million barrels per day, down 4.0% YoY.

Gasoline

• Retail average regular gasoline prices amounted to $3.14 per gallon in the week of
  August 15, down (8.2%) YoY.
• Gasoline prices on the East Coast amounted to $3.12, down (9.3%) YoY.
• Gasoline prices in the Midwest amounted to $3.08, down (11.4%) YoY.
• Gasoline prices on the Gulf Coast amounted to $2.78, down
• Gasoline prices in the Rocky Mountain region amounted to $3.28, down (7.0%) YoY.
• Gasoline prices on the West Coast amounted to $4.16, down (0.9%) YoY.
• Motor gasoline inventories were down by 0.8 million barrels from the prior.
• Motor gasoline inventories amounted to 226.3 million barrels, up 2.6% YoY.
• Production of motor gasoline averaged 9.81 million bpd, up 0.5% YoY.
• Demand for motor gasoline amounted to 9.000 million bpd, down (2.1%) YoY.

Distillates

• Distillate inventories decreased by 0.7 million in the week of August 15
• Total distillate inventories amounted to 113.7 million barrels, down
• Distillate production averaged 5.137 million bpd, up 5.0% YoY.
• Demand for distillates averaged 3.701 million bpd in the week, up 3.5% YoY

Natural Gas

• Natural gas inventories increased by 56 billion cubic feet last week.
• Total natural gas inventories now amount to 3,186 billion cubic feet, down (3.4%) YoY.

High-yield:

High yield bond yields remained unchanged at 7.05% while spreads widened 4bps to 328bps. Leveraged loan yields increased 4bps to 7.97% and spreads widened 2bps to 457bps. WTD high yield bond returns were positive 25bps. WTD Leveraged loan returns were positive 6bps. 10yr treasury yields increased 5bps to 4.29%. Spreads in both High Yield and Leveraged Loans widened modestly as investors continued to absorb robust earnings, steady issuance, and dovish Fed signals.

Week ended 08/15/2025

Yields & Spreads¹

Pricing & Returns¹

Fund Flows²

New Issue²

Distressed Level (trading in excess of 1,000 bps)²

Total HY Defaults

Leveraged loans:

Week ended 08/15/2025

Yields & Spreads¹

Leveraged Loan Index¹

Fund Flows²

New Issue²

Distressed Level (loan price below $80)¹

Todal Leveraged Loan Defaults

Default activity:

• Most recent defaults include: Maverick Gaming ($215mn, 7/17/2025), Del Monte Foods ($864mn, 7/2/2025), Everstream ($495mn, 5/28/2025), At Home ($1.6bn, 5/15/2025), and Aegis Toxicology ($164mn, 5/9/2025), Ascend Performance Materials ($1.0bn, 4/21/2025), Sunnova ($800mn, 4/1/2025), and Astra Acquisition ($1.0bn, 3/10/2025).

CLOs:

Week ended 08/15/2025

New U.S. CLO Issuance²

New U.S. CLO Issuance²

Note:High-yield and leveraged loan yields and spreads are swap-adjusted

¹ Source: Credit Suisse High Yield and Leveraged Loan Index
² Source: JP Morgan

Ratings activity:

• S&P and Moody’s High Yield Ratings

Appendix:

Diagram A: Leveraged Loan Trading Levels

Diagram B: High Yield and Leveraged Loan LTM Price

Diagram C: Leveraged Loan and High Yield Returns

Diagram J: New Issue - Leveraged Loan and High Yield

Diagram K: Leveraged Loan + HY Defaults by Sector – LTM

‍Diagram L: CLO Economics

Diagram M: Developed Country Govt. Bond Yields (%)

Diagram N: S&P 500 Historical Multiples

Diagram O: U.S. Middle-Market M&A Valuations (EV/EBITDA)

Diagram P: U.S. Large Cap M&A Valuations (EV/EBITDA)

Diagram Q: Dry Powder for All Private Equity Buyouts

Diagram R: Structured Credit Spreads

Diagram S: Structured Credit Yield

Diagram T: SOFR CURVE

Diagram U: CMBS Spreads

ZCGC Real Estate

- The chart from Goldman Sachs Global Investment Research highlights that renting has become more affordable than buying a home since 2021, with the rent-to-income ratio stabilizing around 25% while the mortgage payment-to-income ratio spiked to 35% due to rising interest rates and home prices, a trend supported by Bankrate's 2025 study showing rental costs outpacing mortgage payments in 38 U.S. metros.

- High mortgage rates, currently above 7%, have widened this affordability gap by increasing monthly ownership costs, freezing the housing market as owners cling to low-rate loans and buyers delay purchases, a phenomenon echoed by a 2023 Federal Reserve study linking high rates to reduced housing mobility.

- Historical data from the National Association of Realtors shows similar affordability gaps preceded housing market corrections, suggesting a potential shift if interest rates drop, though current supply-demand imbalances—fewer homes for sale than buyers—may sustain high prices despite the rental advantage.

Sources: Census, NAR

Freight Rates

Drewry World Container Index

China-Global & Shanghai Export Container Freight Index