It was a mixed week. The Federal Reserve’s preferred inflation measure came in hot: prices rose 4.1% year over year, the fastest pace since early 2023, and the core reading hit 3.4%, the highest since late 2023.
Some Fed officials are now talking about raising interest rates again instead of cutting them, which is bad news for struggling companies. Higher rates for longer mean that businesses facing large debt payments coming due in 2026 and 2027 will have a harder time refinancing on affordable terms.
On the brighter side, weekly unemployment claims dropped to 215,000, consumer confidence improved, and oil prices fell as shipping through the Strait of Hormuz returned to normal, easing the energy costs that helped push inflation higher this spring.
In the restructuring world, things stayed orderly rather than chaotic: Saks Global wrapped up its bankruptcy and relaunched as Exemplar Luxury Group with about 75% less debt, and the biggest new filing of the week (Sangamo Therapeutics) was a controlled sale process with two committed buyers lined up, not a panicked collapse. Creative out-of-court deals continued, and no surprising court decisions dropped during the week.
Bottom line: Inflation at its highest in years limits how optimistic we can be, but the market has already digested the Fed’s tough stance, the job market looks solid, and falling energy prices help a little; enough to nudge our outlook up slightly from last week’s 3.7. Keep an eye on upcoming debt maturities, how private lenders are valuing their loans, and whether oil prices stay low.
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