U.S. News

• Consumer Price Index

• • • The Consumer Price Index increased 2.8% year-over-year in February, down from 3.0% in January, beating economist expectations of 2.9%
    • Core CPI (excluding food and energy) rose 3.1% annually, the lowest since April 2021, and 0.2% month-over-month, showing signs of inflation easing
    • Shelter costs increased 4.2% year-over-year, the smallest 12-month rise since December 2021, while gas prices declined, contributing to overall inflation moderation

• Producer Price Index

• • • Wholesale inflation remained flat in February, with the Producer Price Index (PPI) unchanged, below expectations of a 0.3% increase
    • The 12-month wholesale inflation rate dropped to 3.2%, down from 3.7% in January, indicating easing price pressures
    • Food prices surged due to a 111% increase in egg prices, while gas prices declined; raw material costs rose 1.3%, potentially signaling future inflationary effects from tariffs

• Consumer Sentiment

• • • Consumer sentiment dropped to a 29-month low of 57.6 in March, down from 64.7 in February, amid concerns over tariffs and economic uncertainty
    • Future economic expectations fell sharply to 54.2 from 64.0, marking the lowest level since mid-2022, with inflation expectations rising to 4.9% over the next year
    • Stock markets initially declined due to policy uncertainty but rebounded, with the Dow Jones and S&P 500 posting gains on Friday despite economic concerns

• U.S. Tariff & Trade

• • • President Trump said the US will impose so-called reciprocal tariffs on April 2, reiterating this February memo directing agencies to equalize U.S. tariff levels with the duties and non-tariff barriers imposed by other nations
    • On March 13 Canada imposed 25 percent reciprocal tariffs on C$12.6 billion worth of steel products, C$3 billion worth of aluminum products, and C$14.2 billion worth of additional goods imported from the U.S.
    • The European Union announced a two-pronged retaliatory response to the 25 percent tariffs the U.S. imposed on imports of steel and aluminum and derivative products as of March 12. These measures will not take effect for several weeks, and EU officials said they are “ready to negotiate” with the U.S. during that time
    • Year-over-year the U.S. trade deficit was up 96.5 percent from January 2024 as imports rose
      23.1 percent to $401.2 billion and exports gained 4.1 percent to $269.8 billion

  Target Country	Current US Tariffs	Goods Targeted	Effective Date	Tariff %
  China	Sec 301 China Origin Tariffs	Most goods	7/16/2018	Most goods are subject to tariffs ranging from 27.5% to 45%, with select goods facing tariffs as high as 100%
  	4 Year Review of Sec 301	A select number of goods such as electric vehicles, batteries, syringes, medical gloves, and solar cells	9/27/2024
  	IEEPA China Tariff	All goods of Chinese origin	2/1/2025
  Canada	IEEPA Canada Tariff	All goods, except USMCA qualifying goods	3/4/2025	25%, except for Canadian energy products, which are subject to a 10% tariff
  Mexico	IEEPA Mexico Tariff	All goods, except USMCA qualifying goods	3/4/2025	25%
  All Countries	Sec 232 Steel / Aluminum & Derivatives	Steel, aluminum, and certain derivatives of steel and aluminum	3/12/2025	25%

  Target Country	Potential Tariff Action	Notes
  All Countries	Reciprocal Tariffs	Expected to be implemented April 2nd on imports from countries engaged in “unfair and unbalanced trade with the U.S.”
  All Countries	Semiconductors	President Trump stated tariffs on semiconductor chips would begin at “25% or higher” though no specific implementation date has been provided
  All Countries	Pharmaceuticals, Automobiles, Lumber, Copper	During a speech on February 19th, President Trump stated that tariffs on these products would be introduced “over the next month or sooner”
  All Countries	Retaliatory Tariffs	The Trump administration plans to impose tariffs or other measures against any foreign government that enforces a “fine, penalty, tax, or other burden” deemed discriminatory, disproportionate, or intended to extract substantial funds or intellectual property from American companies
  All Countries	Agricultural Products	On March 3, 2025, President Trump announced that new tariffs on imported agricultural products will take effect on April 2, 2025. He urged American farmers to increase domestic production in anticipation of these measures
  European Union	Alcoholic Beverages	President Trump threatened to impose a 200% tariff on European alcoholic beverages, including wine and cognac, unless EU retracts its 50% tariff on U.S. whiskey imports

• Jobless Claims

• • • Initial jobless claims, a measure of how many workers were laid off across the U.S., decreased to 220,000 in the week ended March 7, down 2,000 from the prior week.
    • The four-week moving average was 226,000, up 1500 from the prior week.
    • Continuing claims – those filed by workers unemployed for longer than a week – decreased by 27,000 to 1.870 million in the week ended February 28. This figure is reported with a one-week lag.

• Fed’s Balance Sheet

• • • The Federal Reserve’s assets totaled $6.760 trillion in the week ended March 14, up $2.8 billion from the prior week.
    • Treasury holdings totaled $4.242 trillion, down $0.7 billion from the prior week.
    • Holdings of mortgage-backed securities (MBS) were $2.20 trillion in the week, down $8.0 billion from the prior week.

• Total Public Debt

• • • Total public debt outstanding was $36.22 trillion as of March 14, an increase of 5.0% from the previous year.
    • Debt held by the public was $28.91 trillion, and intragovernmental holdings were $7.30 trillion.

• GDP

• • • The latest annualized U.S GDP stands at $29.72 trillion as of December 31, an increase of 5.03% from the previous year
    • The total public debt-to-GDP ratio is at 121.87% as of December 31, an increase of 1.71% from the previous year

• Inflation Factors

• CPI:

• • • • The consumer-price index rose 2.8% in February year over year.
      • On a monthly basis, the CPI increased 0.2% in February on a seasonally adjusted basis, after increasing 0.5% in January.
      • The index for all items less food and energy (core CPI) rose 0.2% in February, after rising 0.4% in January.
      • Core CPI increased 3.1% for the 12 months ending February.

• Food & Beverages:

• • • • The food at home index increased 1.8% in February from the same month a year earlier, and increased 0.0% in February month over month.
      • The food away from home index increased 3.7% in February from the same month a year earlier, and increased 0.4% in February month over month.

• Commodities:

• • • • The energy commodities index decreased (0.9%) in February after increasing 1.9% in
      • The energy commodities index fell (3.2%) over the last 12 months.
      • The energy services index rose 0.8% in February after increasing 1.8% in January.
      • The energy services index rose 3.3% over the last 12 months.
      • The gasoline index fell (3.1%) over the last 12 months.
      • The fuel oil index fell (5.1%) over the last 12 months.
      • The index for electricity rose 2.5% over the last 12 months.
      • The index for natural gas rose 6.0% over the last 12 months.

• Supply Chain:

• • • • Drewry’s composite World Container Index decreased to $2,367.75 per 40ft
      • Drewry’s composite World Container Index has decreased by (25.1%) over the last 12 months.

• Housing Market:

• • • • The shelter index increased 0.3% in February after increasing 0.4% in January.
      • The rent index increased 0.2% in February after increasing 0.4% in January.
      • The index for lodging away from home increased 2.9% in February after increasing (3.9%) in January.

• Federal Funds Rate

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

World News

• Middle East

• • • The Trump administration launched significant military strikes against Yemen’s Iran-backed Houthi rebels, citing the group’s threats to resume attacks on international shipping in strategic waterways, signaling the start of a sustained U.S. military campaign in the region
    • The strikes targeted Houthi missile launchers, leadership locations, and infrastructure, aiming to deter future threats and send a message to Iran about its alleged support for the group
    • The U.S.-Ukraine mineral deal is framed as a potential security guarantee for Ukraine, but analysts argue it lacks explicit defense commitments and may not ensure long-term American military support
    • U.S. envoy Adam Boehler’s direct negotiations with Hamas, including a discussion about a possible five-to-ten-year truce, sparked backlash from Israeli officials, who viewed it as weakening Israel’s position and potentially legitimizing the militant group

• Europe

• • • Ukraine’s withdrawal from Kursk, after months of fighting, marked the end of its attempt to hold Russian territory as a bargaining chip in peace negotiations
    • President Trump described recent U.S.-Russia talks on ending the Ukraine war as “productive,” while Putin rejected an immediate cease-fire but signaled a willingness for further discussions
    • The European Commission is proposing a major investment plan to bolster the EU’s defense capabilities, prioritizing weapons manufacturing within the bloc and enhancing joint procurement
    • President Trump threatened a 200% tariff on European wines, Champagne, and other alcoholic beverages in response to the EU’s 50% tariff on American whiskey

• China

• • • The U.S. plans to impose fees of up to $1.5 million on Chinese-built ships docking in American ports to counter China’s dominance in global shipbuilding, which now produces 53% of the world’s commercial vessels
    • Beijing is unhappy about CK Hutchison’s planned sale of its Panama port operations to a BlackRock-led consortium, criticizing it as “betraying” China and negatively impacting Chinese trade
    • Taiwan’s president Lai Ching-te announced new measures, including reinstating military courts, to combat Chinese espionage and influence efforts, as tensions escalate across the Taiwan Strait
      China is intensifying deep-sea exploration to gather oceanographic data, drawing security concerns from countries like India and Japan, who see such activities as military reconnaissance in disguise

• Germany

• • • Friedrich Merz, Germany’s incoming conservative chancellor, secured crucial support from the Green Party for his proposal to relax the country’s strict debt rules, allowing significant increases in defense and infrastructure investment amid growing geopolitical tensions

• Canada

• • • Former central banker Mark Carney decisively won Canada’s Liberal Party leadership race and met with outgoing Prime Minister Justin Trudeau to prepare a swift power transition, aiming to confront a damaging trade war with President Trump’s United States

• South Korea

• • • Acting President Choi Sang-mok, worried about being targeted by Trump’s escalating tariffs, wants to communicate directly with Trump to prevent new economic tensions, but the U.S. is reluctant to engage until South Korea’s leadership crisis is resolved

• Sudan

• • • Sudan has categorically refused a request by the U.S. to discuss taking in Palestinian refugees displaced under Donald Trump’s controversial Gaza redevelopment proposal, which involves turning Gaza into a luxury tourist area and displacing its more than 2 million residents

• Pakistan

• • • Pakistani security forces ended a deadly train hijacking by Baloch separatist militants, resulting in the deaths of 21 passengers, 4 paramilitary personnel, and 33 militants, in an attack highlighting ongoing regional tensions

• United Kingdom

• • • Labour leader Keir Starmer and finance minister Rachel Reeves face intense backlash, including their own MPs, over plans to significantly cut benefits, including disability payments, raising accusations that the government is betraying traditional Labour values

• France

• • • French inflation cooled to its lowest level in four years, giving the European Central Bank further reason to cut interest rates. Consumer prices in France rose 0.9% in February, lower than the 1.5% forecasted by economists

• Argentina

• • • Argentine President Javier Milei faces political backlash after a cryptocurrency he endorsed, $LIBRA, collapsed, wiping out $4 billion. Accused of promoting a scam, Milei denies involvement, calling it a private matter. A federal judge is investigating, while critics demand impeachment. The controversy threatens Milei’s credibility as he seeks U.S. support for economic reforms and an IMF loan

• Venezuela

• • • President Trump is planning to revoke a Biden-era license allowing Chevron to produce oil in Venezuela. Trump said that President Maduro’s failure to assist in deporting migrants led to the decision

Commodities

• Oil Prices

• • • WTI: $67.18 per barrel
      • 0.21% WoW; (6.33%) YTD; (15.73%) YoY
    • Brent: $70.58 per barrel
      • 0.31% WoW; (5.44%) YTD; (16.01%) YoY

• US Production

• • • U.S. oil production amounted to 13.6 million bpd for the week ended March 7, up 0.1 million
      bpd from the prior week.

• Rig Count

• • • The total number of oil rigs amounted to 592, down 0 from last week.

• Inventories

• • • Crude Oil

      • Total U.S. crude oil inventories now amount to 435.2 million barrels, down (2.6%) YoY.
      • Refiners operated at a capacity utilization rate of 86.5% for the week, up from 85.9%
        in the prior week.
      • U.S. crude oil imports now amount to 5.813 million barrels per day, down (0.4%) YoY.

    • Gasoline

      • Retail average regular gasoline prices amounted to $3.08 per gallon in the week of
        March 14, down (10.4%) YoY.
      • Gasoline prices on the East Coast amounted to $3.06, down (9.3%) YoY.
      • Gasoline prices in the Midwest amounted to $2.98, down (11.4%) YoY.
      • Gasoline prices on the Gulf Coast amounted to $2.78, down (8.4%) YoY.
      • Gasoline prices in the Rocky Mountain region amounted to $3.08, down (3.6%) YoY.
      • Gasoline prices on the West Coast amounted to $4.24, down (4.3%)
      • Motor gasoline inventories were down by 5.7 million barrels from the prior week.
      • Motor gasoline inventories amounted to 241.1 million barrels, up 3.0% YoY.
      • Production of motor gasoline averaged 9.56 million bpd, down (3.6%) YoY.
      • Demand for motor gasoline amounted to 9.182 million bpd, up 1.5% YoY.

    • Distillates

      • Distillate inventories decreased by -1.6 million in the week of March 14.
      • Total distillate inventories amounted to 117.6 million barrels, down (0.3%) YoY.
      • Distillate production averaged 4.462 million bpd, down (2.2%) YoY.
      • Demand for distillates averaged 3.898 million bpd in the week, up 15.5% YoY.

• Natural Gas

• • • Natural gas inventories decreased by 62 billion cubic feet last week.
    • Total natural gas inventories now amount to 1,698 billion cubic feet, down (27.0%) YoY.

Credit News

High yield bond yields increased 34bps to 7.63% and spreads increased 39bps to 363bps. Leveraged loan yields increased 12bps to 8.59% and spreads increased 16bps to 488bps. WTD high yield bond returns were negative 93bps and leveraged loan returns were negative 30bps. 10-year Treasury yield decreased 1bps to 4.27%. Yields and spreads rose as market volatility remained elevated amid escalating trade war, policy uncertainty and rising concerns around US growth.

High-yield:

Week ended 03/14/2025

• Yields & Spreads¹
  
• Pricing & Returns¹
  
• Fund Flows²
  
• New Issue²
  
• Distressed Level (trading in excess of 1,000 bps)²
  
• Total HY Defaults
  

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

Leveraged loans:

Week ended 03/14/2025

• Yields & Spreads¹
  
• Leveraged Loan Index¹
  
• Fund Flows²
  
• New Issue²
  
• Distressed Level (loan price below $80)¹
  
• Total Loan Defaults
  

Default activity:

• Most recent defaults include: Aimbridge Hospitality ($1.1bn, 1/31/2025), Exela Intermediate LLC ($1.2bn, 1/15/2025), City Brewing ($886mn, 1/2/2025), The Container Store ($163mn, 12/22/2024), Party City ($264mn, 12/21/2024), Hearthside Food Solutions ($2.6bn, 11/22/24), Spirit Airlines ($1.1bn, 11/18/24), and Franchise Group Inc ($1.1bn, 11/3/24).

CLOs:

Week ended 03/14/2025

• 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

Source: Credit Suisse Leveraged Loan Index

Diagram B: High Yield and Leveraged Loan LTM Price

Diagram C: Leveraged Loan and High Yield Returns

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

Diagram L: CLO Economics

Diagram N: Developed Country GovBond Yields (%)

Diagram O: S&P 500 Historical Multiples

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

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

Diagram R: Dry Powder for All Private Equity Buyouts

Diagram S: Structured Credit Spreads

Diagram T: Structured Credit Yield

Diagram U: SOFR CURVE

Diagram V: CMBS Spreads

Freight Rates

Drewry World Container Index

China-Global & Shanghai Export Container Freight Index