GDP Second Estimate (Q1 2026)

• Q1 GDP was revised down to 1.6% annualized from the 2.0% advance estimate, missing consensus, driven by downward revisions to both consumer spending and private investment
• Inflation pressures remained acute with the PCE price index unchanged at 4.5% and core PCE revised up to 4.4% — well above the Fed's 2% target and effectively closing the door on near-term rate cuts
• Real GDI came in at just 0.9%, residential investment fell for a fifth consecutive quarter, and the GDP/GDI average of 1.3% underscores an economy losing momentum heading into an Iran war-driven energy shock

Consumer Confidence

• The Conference Board Consumer Confidence Index edged down 0.7 points to 93.1 in May — a marginal beat versus the 92.0 consensus — masking an increasingly bifurcated picture beneath the headline
• The Present Situation Index fell 3.2 points to 121.2 as views on current business and labor market conditions deteriorated, while the Expectations Index rose to 74.4 — its highest reading of the year but still below the 80 threshold historically associated with recession risk
• Consumer write-in responses skewed heavily pessimistic, with references to prices, oil and gas, and war rising in frequency for the second consecutive month, while big-ticket spending plans continued shifting from "yes" to "no"

Personal Income, Spending & PCE Deflator

• Personal income was flat at 0.0% in April against a 0.4% consensus — a significant miss pointing to mounting household budget pressure — while spending held at 0.5%, implying consumers are drawing down savings to sustain expenditures
• Headline PCE rose 0.4% month-over-month and 3.8% year-over-year, while core PCE came in at 0.2% MoM and 3.3% YoY — both broadly in line, offering modest comfort to the Fed but still far from target
• The combination of stagnant income, resilient spending, and sticky core inflation above 3% reinforces a stagflationary undertow that leaves the Fed in a difficult position heading into the summer policy meetings

Jobless Claims 

• Initial jobless claims, a measure of how many workers were laid off across the U.S., increased to 215,000 in the week ended May 22, up 5,000 from the prior week
• The four-week moving average was 209,000, up 6,250 from the prior week
• Continuing claims – those filed by workers unemployed for longer than a week – increased at 1.786 million in the week ended May 15. This figure is reported with a one-week lag

Fed’s Balance Sheet

• The Federal Reserve's assets totaled $6.704 trillion in the week ended May 29, down $9.3 billion from the prior week
• Treasury holdings totaled $4.461 trillion, up $8.5 billion from the prior week
• Holdings of mortgage-backed securities (MBS) were $1.97 trillion in the week, down $7.1 billion from the prior week

Total Public Debt 

• Total public debt outstanding was $39.18 trillion as of May 29, an increase of 8.2% from the previous year
• Debt held by the public was $31.47 trillion, and intragovernmental holdings were $7.70 trillion

GDP

• The latest annualized U.S. GDP stands at $31.82 trillion as of March 31, 2026, an increase of 1.26% from the previous quarter, and an increase of 5.92% from the previous year
• The total public debt-to-GDP ratio is at 122.77% as of March 31, an increase of 2.23% from the previous year

Inflation Factors

CPI:

• The consumer-price index rose 3.8% in April year over year
• On a monthly basis, the CPI increased 0.6% in April on a seasonally adjusted basis, after increasing 0.9% in March
• The index for all items less food and energy (core CPI) rose 0.4% in April, after rising 0.2% in March
• Core CPI increased 2.8% for the 12 months ending April

Food & Beverages:

• The food at home index increased 3.0% in April from the same month a year earlier, and increased 0.7% in April month over month
• The food away from home index increased 3.6% in April from the same month a year earlier, and increased 0.2% in April month over month

Commodities:

• The energy commodities index increased 5.6% in April after increasing 21.3% in March
• The energy commodities index rose 29.2% over the last 12 months
• The energy services index rose 0.9% in April after decreasing (0.2%) in March
• The energy services index rose 5.4% over the last 12 months
• The gasoline index rose 28.4% over the last 12 months
• The fuel oil index rose 54.3% over the last 12 months
• The index for electricity rose 6.1% over the last 12 months
• The index for natural gas rose 3.0% over the last 12 months

Supply Chain:

• Drewry’s composite World Container Index increased to $2,799.55 per 40 ft container for the week of May 29
• Drewry’s composite World Container Index has increased by 11.6% over the last 12 months

Housing Market:

• The shelter index increased 0.6% in April after increasing 0.3% in March
• The rent index increased 0.6% in April after increasing 0.3% in March
• The index for lodging away from home increased 4.0% in April after increasing 4.6% in March

Federal Funds Rate

• The effective Federal Funds Rate is at 3.62%, down (0.02%) year to date

Middle East

• The UAE carried out dozens of coordinated airstrikes against Iran — targeting energy infrastructure across the Strait of Hormuz, Bandar Abbas, and the Asaluyeh petrochemical complex — revealing a far deeper military involvement than previously disclosed, conducted in coordination with U.S. and Israeli intelligence
• The campaign deepened a strategic rift with Saudi Arabia, which complained to Washington that UAE strikes were escalating regional energy risks, while the UAE's withdrawal from OPEC and its tightening military alliance with Israel signal a fundamental realignment of Gulf geopolitics
• A WSJ investigation tracked a ghost fleet of aging tankers conducting covert ship-to-ship oil transfers across Asia's busiest shipping corridors, ferrying sanctioned Iranian crude to China despite U.S. enforcement efforts
• The network operates through a web of deceptive tactics in plain sight thousands of miles from the Persian Gulf, underscoring the limits of Washington's sanctions pressure and the resilience of Iran's oil revenue stream

Europe

• An armed Russian drone crashed into a residential apartment building in Galati, Romania — a NATO member — injuring several people and triggering a fierce response from the alliance, with NATO Secretary-General Rutte calling it a direct demonstration of Russia's reckless disregard for European security
• The incident, compounded by recent drone incursions into Lithuania and threats against Latvia, has heightened fears that Russia is deliberately testing NATO's eastern flank defenses as its battlefield position in Ukraine deteriorates
• Beijing threatened to launch anti-discrimination and supply-chain security probes against the EU if Brussels proceeds with its proposed "overcapacity instrument" designed to curb heavily subsidized Chinese imports across sectors including EVs, steel, and solar panels
• The escalating rhetoric coincides with five EU member states — including France, Spain, and the Netherlands — pushing the European Commission to dramatically expand trade defenses against China, with the commission itself declaring the current state of EU-China trade relations "not sustainable"

China

• Faced with domestic overcapacity and weak demand, Chinese manufacturers are aggressively expanding factory operations globally — from BYD in Hungary and Brazil to Midea partnering with Electrolux in North America — in a trend that is intensifying competitive pressure on Western incumbents and drawing scrutiny from policymakers on both sides of the Atlantic
• The Trump-Xi summit produced a new bilateral "board of investment" that could accelerate Chinese factory investment into the U.S., even as dozens of Democratic lawmakers push for an outright ban on Chinese automakers manufacturing domestically
• Despite the U.S. military blockade, Iran generated an estimated $31 billion in oil revenue from China last year through a shadow fleet of roughly 1,500 aging tankers conducting covert ship-to-ship transfers in a legal gray zone 45 miles off Malaysia's coast — with an estimated 90 million barrels still in offshore storage providing the regime with additional hard currency through at least October
• China has explicitly ordered domestic firms not to comply with U.S. sanctions on Chinese refineries, while the number of observed ship-to-ship transfers in the area more than doubled between 2023 and 2025 — underscoring the fundamental limits of sanctions as a tool of economic coercion against a regime with an entrenched maritime workaround

India

• Google's $15 billion AI data center hub in water-stressed Visakhapatnam, India — backed by $2.3 billion in state subsidies and partnerships with Adani and Bharti Airtel — highlights the intensifying geopolitical race to anchor U.S. AI infrastructure in high-growth emerging markets, even as local displacement and resource competition spark growing backlash that could complicate future build-outs across the developing world

Africa

• The WHO declared a global health emergency over an Ebola outbreak in Congo and Uganda, with around 80 deaths and over 200 suspected cases recorded — including cases in both countries' capitals — involving the rare Bundibugyo strain for which no approved vaccine or treatment currently exists

Cuba

• CIA Director Ratcliffe made a rare visit to Havana to warn Cuban officials they have a limited window to engage with the Trump administration, as the island faces severe fuel shortages, widespread blackouts, and growing street protests

Australia

• Australia is permanently diversifying its oil imports beyond Middle East suppliers and accelerating its renewable energy transition, even as it secures emergency fuel reserves to buffer against the ongoing Strait of Hormuz disruption

Canada

• Canada approved Enbridge's ~$3 billion Westcoast pipeline expansion, adding 300 million cubic feet per day of capacity as part of PM Carney's push to reduce U.S. trade dependence and boost Asian energy exports

Italy

• Trump publicly broke with Italian PM Giorgia Meloni — once his closest European ally — after she refused to send forces to the Strait of Hormuz and called his attacks on Pope Leo "unacceptable," leaving her isolated on both sides of the Atlantic

Japan

• Japan will release an additional 20 days' worth of oil reserves in early May to stabilize energy prices, as the country relies on the Middle East for over 90% of its crude imports and the Strait of Hormuz remains largely blocked

New Zealand

• New Zealand plans to spend roughly $7 billion on its military, including enhanced strike capabilities and new helicopters, aiming to reverse military attrition by recruiting 2,500 personnel in the coming years

Venezuela

• A Colombian military C-130 carrying 128 people crashed shortly after takeoff in the southern jungle, killing 66, injuring dozens and prompting criticism over long-standing deficiencies in military aircraft and airport infrastructure

Oil Prices

• WTI: $87.93 per barrel
• (8.98%) WoW; +17.37% YTD; +42.19% YoY
• Brent: $92.05 per barrel
• (11.10%) WoW; +17.19% YTD; +43.49% YoY

US Production

• U.S. oil production amounted to 13.7 million bpd for the week ended May 22, up 0.0 million bpd from the prior week.

Rig Count

• The total number of oil rigs amounted to 562, up 4 from last week.

Inventories

Crude Oil

• Total U.S. crude oil inventories now amount to 445.0 million barrels, up 0.4% YoY
• Refiners operated at a capacity utilization rate of 91.6% for the week, down from 91.7% in the prior week
• U.S. crude oil imports now amount to 5.901 million barrels per day, down (1.2%) YoY

Gasoline

• Retail average regular gasoline prices amounted to $4.39 per gallon in the week of May 29, up 38.9% YoY
• Gasoline prices on the East Coast amounted to $4.42, up 42.1% YoY
• Gasoline prices in the Midwest amounted to $4.44, up 43.2% YoY
• Gasoline prices on the Gulf Coast amounted to $4.09, up 44.8% YoY
• Gasoline prices in the Rocky Mountain region amounted to $4.69, up 44.7% YoY
• Gasoline prices on the West Coast amounted to $5.70, up 29.8% YoY
• Motor gasoline inventories were down by 2.6 million barrels from the prior week
• Motor gasoline inventories amounted to 211.6 million barrels, down (5.2%) YoY
• Production of motor gasoline averaged 9.94 million bpd, up 1.9% YoY
• Demand for motor gasoline amounted to 9.256 million bpd, down (2.1%) YoY

Distillates

• Distillate inventories decreased by 2.1 million in the week of May 29
• Total distillate inventories amounted to 100.8 million barrels, down (2.5%) YoY
• Distillate production averaged 5.082 million bpd, up 5.6% YoY
• Demand for distillates averaged 3.948 million bpd in the week, up 1.4% YoY

Natural Gas

• Natural gas inventories increased by 92 billion cubic feet last week
• Total natural gas inventories now amount to 2,483 billion cubic feet, up 0.3% YoY

High-yield:

High yield bond yields decreased 13bps to 7.10% and spreads tightened 8bps to 305bps. Leveraged loan yields decreased 2bps to 8.75% and spreads widened 1bps to 487bps. WTD high yield bond returns were positive 54bps. WTD leveraged loan returns were positive 14bps. 10yr treasury yields decreased 14bps to 4.45%. High-yield bond yields declined on optimism around a potential US-Iran ceasefire extension, while capital market activity slowed and modest outflows emerged after strong inflows from early April to mid-May. Leveraged loan yields also declined, supported by ceasefire hopes, steady CLO ETF inflows, and the record $13.0bn single-tranche syndicated loan issuance by Warner Bros. Discovery.

Week ended 05/29/2026

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 05/29/2026

Yields & Spreads¹

‍

Pricing & Returns¹

Fund Flows²

New Issue²

Distressed Level (loan price below $80)¹

Total Leveraged Loan Defaults

Default activity: 

• Most recent defaults include: QVC Group ($2.2bn, 4/16/2026), Cumulus Media ($641mn, 03/05/2026), Trinseo ($390mn, 02/17/2026), Beasley Broadcasting Group ($189mn, 02/01/2026), Nine Energy Service ($300mn, 02/01/2026), Multi-Color ($4.5bn, 01/29/2026), Pretium Packaging ($201mn, 01/28/2026), Saks Global Enterprises ($2.7bn, 12/30/2025), and United Site Services ($2.6bn, 11/30/2025).

CLOs: 

Week ended 05/29/2026

New U.S. CLO Issuance²

New U.S. CLO YTD 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 ($B)

Diagram R: Dry Powder for All US Debt ($B)

Diagram S: Structured Credit Spreads

Diagram T: Structured Credit Yield

Diagram U: SOFR Curve

Diagram V: CMBS Spreads