LinkedIn Post – 5/28/25 June Fed Meeting…Will it be a yawner?

Based on Powell’s testimony and the recent economic data, June’s Fed meeting is setting up to be quite the yawner. While we still believe a June rate cut is the right thing to do to stay ahead of a slowing economy, the Fed is clearly saying “not yet” and waiting for more definitive evidence of tariff impact on inflation and/or economic deterioration. Nvidia is about to report its latest earnings and has become a macro barometer for the stock market, AI sentiment, and even China/US tensions. Away from that, the “Big Beautiful Bill” passed by the House now goes to the Senate where it will certainly be recut before going to Trump. Elon has essentially left the White House and the GOP establishment has no political will to cement DOGE’s spending cut recommendations – the resulting bill is expected to drive GDP growth but at the expense of America’s balance sheet (i.e. continued deficit spending) ☹, see Linked-In post “Mr. Wafer Thin Creosote” This brings us right back to “Higher For Longer” (HFL) as seen by UST 10y yield surging back above 4.5%. As we’ve said before, this is leading to continued dispersion between the haves and have nots. This always starts at the lowest credit quality rungs, and this time is no different. CCC spreads have lagged the broader credit universe despite a sharp rally from April’s Liberation Day-induced woes. And we expect to see incremental rating agencies actions both to the up and downside. We should be positioned for that. Along those lines my partner Sanjay Aiyar will be presenting our strategy at Don A. Steinbrugge, CFA Gaining The Edge – Global Cap Intro 2025 conference, a virtual-only event taking place from June 16 to 27. Agecroft Partners, this is one of the largest capital introduction events in the alternative investment industry. If you’re interested in meeting with us, please reach out as soon as possible so we can reserve a spot on our schedule. Please find a link to the conference and more info here: