Consumer Price Index

• Consumer Price Index rose 0.4% in August (largest gain since January), putting annual inflation at 2.9%; core inflation (excluding food and energy) rose 0.3% monthly, 3.1% annually
• Rising costs from Trump’s tariffs, higher energy prices, and increases in vehicles, shelter, and food (notably coffee up 21% year-over-year) drove inflation; services inflation rose 3.6% year-over-year
• The Federal Reserve is expected to cut rates by 0.25 percentage points next week (to 4.0–4.25%) but remains cautious due to inflation, weak job growth, and political pressure from Trump

Producer Price Index

• The Producer Price Index (PPI) fell 0.1% in August, its first drop in four months. July’s gain was revised down to 0.7%, and the August reading came in far below the expected 0.3% increase
• Excluding food and energy, core PPI also slipped 0.1% month-over-month, compared with a downwardly revised 0.7% increase in July and against expectations of a 0.3% rise. Annually, core PPI eased to 2.8%, down from 3.4% in July and below the expectations of 3.5%
• The weaker-than-expected inflation data, along with July’s downward revision, strengthens the case for the Federal Reserve to cut interest rates in the coming months

Consumer Sentiment

• Consumer sentiment index fell to 55.4 in September, the lowest in four months, with the sharpest decline among lower- and middle-income Americans
• The current conditions index eased to 61.2 from 61.7, showing only a slight dip in consumers’ views of present circumstances. However, the expectations index dropped more sharply to 51.8 from 55.9
• Long-run inflation outlook rose to 3.9%, while consumers reported greater concerns about jobs, business conditions, and personal finances

U.S. Tariff & Trade‍

• The U.S. Supreme Court agreed to hear consolidated challenges to President Trump’s use of IEEPA for sweeping global tariffs, after lower courts ruled he exceeded his authority; oral arguments are set for early November with a decision expected before year-end
• Amid what appears as growing frustration over stalled peace talks, President Trump has reportedly urged the EU to assess 100% tariffs on imports from India and China to pressure Russia in its war with Ukraine
• South Korea is finalizing its July trade deal with the U.S., anchored by a $350 B investment pledge, and is using Japan’s recent $550 B package as a benchmark; although Korea has stressed, they will not accept identical terms as Japan—especially as its automakers still face a 25% U.S. tariff versus Japan’s 15% rate. 
• The National Retail Federation (NRF) revised their September import container forecast to now only fall 6.8% y/y---a sharp upward revision of 19.4% drop projected only a month ago; although NRF reiterated that the outlook remains "not optimistic" for retail import volumes for the remainder of the year

Jobless Claims

• Initial jobless claims, a measure of how many workers were laid off across the U.S., increased to 263,000 in the week ended September 5, up 27,000 from the prior week.
• The four-week moving average was 240,500, up 9,750 from the prior week.
• Continuing claims – those filed by workers unemployed for longer than a week – decreased at at 1.939 million in the week ended August 29. This figure is reported with a one-week lag.

Fed’s Balance Sheet

• The Federal Reserves assets totaled $6.606 trillion in the week ended September 12, up $3.9 billion from the prior week.
• Treasury holdings totaled $4.201 trillion, down $1.1 billion from the prior week.
• Holdings of mortgage-backed securities (MBS) were $2.10 trillion in the week, down $8.0 billion from the prior week.

Total Public Debt

• Total public debt outstanding was $37.47 trillion as of September 12, an increase of 6.2% from the previous year.
• Debt held by the public was $30.16 trillion, and intragovernmental holdings were $7.31 trillion.

GDP

• The latest annualized U.S GDP stands at $30.35 trillion as of June 30, 2025 an increase of 1.31% from the previous quarter , & an increase of 4.61% from the previous year
• The total public debt-to-GDP ratio is at 119.30% as of June 30, a decrease of -0.74% from the previous year

Inflation Factors

CPI:

• The consumer-price index rose 2.9% in August year over year.
• On a monthly basis, the CPI increased 0.4% in July on a seasonally adjusted basis, after increasing 0.2% in July.
• The index for all items less food and energy (core CPI) rose 0.3% in August, after rising 0.3% in July.
• Core CPI increased 3.1% for the 12 months ending August.

Food & Beverages:

• The food at home index increased 2.7% in August from the same month a year earlier, and increased 0.6% in August month over month.
• The food away from home index increased 3.9% in August from the same month a year earlier, and increased 0.3% in August month over month.

Commodities:

• The energy commodities index increased 1.7% in July after decreasing (1.9%) in July.
• The energy commodities index fell (6.2%) over the last 12 months.
• The energy services index rose (0.3%) in June after decreasing (0.3%) in July.
• The energy services index rose 7.7% over the last 12 months.
• The gasoline index fell (6.6%) over the last 12 months.
• The fuel oil index fell (0.5%) over the last 12 months.
• The index for electricity rose 6.2% over the last 12 months.
• The index for natural gas rose 13.8% over the last 12 months.

Supply Chain:

• Drewry’s composite World Container Index decreased to $2,043.64 per 40ft container for the week of September 12
• Drewry’s composite World Container Index has decreased by (51.0%) over the last 12 months.

Housing Market:

• The shelter index increased 0.4% in August after increasing 0.2% in July.
• The rent index increased 0.4% in  August after increasing 0.2% in July.
• The index for lodging away from home increased 0.3% in August after decreasing (1.5%) in July.

Federal Funds Rate

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

Middle East

• Israeli Prime Minister Benjamin Netanyahu is pressing ahead with an offensive to capture Gaza City—framed as Hamas’s “last stronghold”—but despite Israel weakening Hamas and killing much of its leadership, total defeat of the group remains elusive without a political solution for Gaza’s future
• Secretary of State Marco Rubio continued his visit to Israel despite U.S. displeasure over Israel’s strike on Hamas in Qatar, stressing that Washington remains supportive of Israel while seeking to manage the fallout and push forward stalled cease-fire talks
• The European Union announced plans to partially suspend its trade agreement with Israel and impose sanctions on extremist ministers and violent settlers, while also creating a donor group to fund Gaza’s reconstruction
• Iran agreed to allow the U.N. atomic agency access to its main nuclear sites for the first time since June’s U.S.-Israeli airstrikes, though without deadlines, leaving uncertainty over the fate of its near weapons-grade uranium stockpile

Europe

• Fitch downgraded France’s credit rating from AA- to A+, citing political instability and a ballooning deficit of 5.8% of GDP, just days after Prime Minister François Bayrou was ousted for failing to push through budget cuts
• Russia’s central bank cut its key interest rate to 17% from 18%, marking the third consecutive reduction as economic growth slows and inflation eases
• The U.K. imposed 100 new sanctions on Russia, targeting 70 oil tankers from its “shadow fleet” and 30 entities and individuals supplying weapon components, in response to recent Russian drone and missile strikes
• President Trump urged the EU to impose tariffs of up to 100% on Chinese and Indian goods as part of Russia sanctions talks, but EU officials signaled they won’t adopt tariffs— focusing instead on their next sanctions package targeting firms aiding Moscow

China

• China warned Mexico not to proceed with planned tariff hikes on Chinese goods—particularly autos, which make up about 20% of Mexico’s new car sales—threatening retaliation and framing the move as a response to U.S. pressure
• China’s export growth slowed to 4.4% in August, below forecasts and down from July’s 7.2%, signaling the fading impact of its trade truce with the U.S.
• China has halted U.S. soybean purchases, turning instead to Brazil and other suppliers, using American farmers as leverage in its trade fight with Washington
• China’s military warned the Philippines to stop provocations in the South China Sea, saying any attempt to escalate tensions or involve external forces would fail. The U.S., Japan, and the Philippines held joint maritime exercises in the Philippines’ Exclusive Economic Zone, reinforcing freedom of navigation and opposition to China’s claims

South Korea

• More than 300 South Korean workers detained in a U.S. immigration raid at Hyundai’s Georgia battery plant were released after a week and flown home without handcuffs, following negotiations between Seoul and Washington to ease tensions and protect future U.S.–Korea manufacturing cooperation

Brazil

• Brazil’s Supreme Court convicted former President Jair Bolsonaro of plotting to overturn the 2022 election, sentencing him to 27 years in prison, a ruling that ends his political comeback hopes and highlights the court’s vast power in shaping the country’s democratic course

Nepal

• Sushila Karki, Nepal’s first female chief justice known for her anti-corruption stance, was sworn in as interim prime minister after violent protests over corruption and a social-media ban forced the previous prime minister to resign, leaving at least 40 people dead

Japan

• Japan’s Prime Minister Shigeru Ishiba announced his resignation after less than a year in office, following election setbacks and internal party rebellion. His exit comes just days after securing a tariff deal with President Trump that cut U.S. duties on Japanese goods to 15% in exchange for major Japanese purchases and $550 billion in U.S. investments

India

• President Trump’s 50% tariff on Indian goods, meant to punish New Delhi for buying Russian oil, has backfired. Indian refiners briefly shifted to Middle Eastern crude, but Russia cut prices, making its oil even cheaper and more attractive. The move has strengthened India’s ties with Moscow and Beijing while highlighting the unintended boost to black-market crude trade

Afghanistan

• A magnitude-6.0 earthquake in eastern Afghanistan has killed at least 1,400 people, injured around 3,000, and destroyed more than 5,400 homes. Rescue efforts are hampered by mountainous terrain, landslides, and strong aftershocks, with officials warning the toll could rise further

U.K.

• U.K. Deputy Prime Minister Angela Rayner quit after admitting she underpaid £40,000 in tax on a second home, dealing a major blow to PM Keir Starmer as Labour’s popularity slides. David Lammy was named her replacement

Oil Prices

• WTI: $62.69 per barrel
  
• +1.33% WoW; (11.24%) YTD; (6.86%) YoY
• Brent: $66.99 per barrel
  
• +2.27% WoW; (9.26%) YTD; (5.13%) YoY

US Production

• U.S. oil production amounted to 13.5 million bpd for the week ended September 5, up 0.1 million bpd from the prior week.

Rig Count

• The total number of oil rigs amounted to 539, up 2 from last week.

Inventories

Crude Oil

• Total U.S. crude oil inventories now amount to 424.6 million barrels, up 1.7% YoY.
• Refiners operated at a capacity utilization rate of 94.9% for the week, up from 94.3%
  in the prior week.
• U.S. crude oil imports now amount to 6.742 million barrels per day, down (0.8%) YoY.

Gasoline

• Retail average regular gasoline prices amounted to $3.18 per gallon in the week of
  September 12, down (1.2%) YoY.
• Gasoline prices on the East Coast amounted to $3.18, down (2.7%) YoY.
• Gasoline prices in the Midwest amounted to $3.14, down (1.2%) YoY.
• Gasoline prices on the Gulf Coast amounted to $2.83, down (2.3%) YoY.
• Gasoline prices in the Rocky Mountain region amounted to $3.37, down (3.0%) YoY.
• Gasoline prices on the West Coast amounted to $4.32, up 2.0% YoY.
• Motor gasoline inventories were up by 1.5 million barrels from the prior.
• Motor gasoline inventories amounted to 220.0 million barrels, down (0.7%) YoY.
• Production of motor gasoline averaged 9.59 million bpd, down (0.8%) YoY.
• Demand for motor gasoline amounted to 8.508 million bpd, down (3.1%) YoY.

Distillates

• Distillate inventories decreased by 4.7 million in the week of September 12
• Total distillate inventories amounted to 120.6 million barrels, down (3.6%) YoY
• Distillate production averaged 5.229 million bpd, up 3.4% YoY.
• Demand for distillates averaged 3.377 million bpd in the week, down (11.1%) YoY

Natural Gas

• Natural gas inventories increased by 71 billion cubic feet last week.
• Total natural gas inventories now amount to 3,343 billion cubic feet, down (3.0%) YoY.

High-yield:

High yield bond yields decreased 2bps to 6.87% and spreads increased 4bps to 325bps. Leveraged loan yields decreased 9bps to 7.62% and spreads decreased 2bps to 446bps. WTD high yield bond returns were positive 57bps. WTD leveraged loan returns were positive 17bps. 10yr treasury yields decreased 17bps to 4.01%. High yield bond yields declined as inflation data cleared the way for the Fed to cut rates at this week’s meeting. Capital markets remain active, with issuers pursuing refinancings and inflows hitting their highest level since early August. In leveraged loans, retail funds posted their first outflow in 20 weeks, while repricing and refinancing activity picked up.

Week ended 09/12/2025

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 09/12/2025

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: Spirit Airlines ($852mn, 8/29/2025), ModivCare ($1.1bn, 8/20/2025), Anastasia Beverly Hills ($606mn, 8/11/2025), Claire’s Stores ($506mn, 8/6/2025), Maverick Gaming ($215mn, 7/17/2025), Del Monte Foods ($864mn, 7/2/2025), Everstream ($495mn, 5/28/2025), and At Home ($1.6bn, 5/15/2025).

CLOs:

Week ended 09/12/2025

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

Freight Rates

Drewry World Container Index

China-Global & Shanghai Export Container Freight Index