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Financial markets were roiled today as investors continued to digest Friday’s unexpectedly high inflation print and assess the Fed’s ability to navigate a soft landing for the economy as it grapples to control decades-high inflation. The leveraged loan market did not escape the volatility today, with the S&P/LSTA Leveraged Loan Index returning negative 0.84% during the session, following a 0.30% decline on Friday. Today’s slide was the largest daily decline for the index since March 23, 2020, when the pandemic first took deep root. Prior to today, the index only last month saw its three largest single-day dips since 2020. The asset class has now returned negative 2.77% year-to-date.
Highlighting the troubling inflation picture so far this year, the Federal Reserve might now consider a surprise 0.75% interest rate increase at their meeting this week, according to a WSJ report. The central bank has not raised interest rates by 75 bps at a meeting since 1994, and has already raised the rate by 50 bps at last month’s meeting, the first time it has done so since 1994.
An expanded data set is available through the link at the top of the story for LCD Research subscribers.
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