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CREFC Signal: Our New Podcast

July 21, 2026

CREFC recently launched CREFC Signal, a podcast featuring timely conversations with leaders across the commercial real estate finance industry.

The inaugural episode, hosted by CREFC President & CEO Lisa Pendergast, traces CREFC’s evolution from its founding through decades of market cycles to its role today as the leading voice of the commercial real estate finance industry. Lisa is joined by past CREFC Chairs and industry leaders Leland F. Bunch, Annemarie DiCola, Chris Hoeffel, Rick Jones, Dan Olsen, and Patrick Sargent.

What's next: Stay tuned for the next episode which will examine recently released bank capital proposals from U.S. regulators, what they could mean for CRE lenders, investors, and the broader market, and CREFC’s plan of action in response. 

Listen to the first episode and subscribe for future conversations shaping commercial real estate finance.

Where to listen: 

• Signal Podcast Homepage
• Apple Podcasts
• Spotify

We welcome your ideas and suggestions for future podcast episodes and guests. Contact us at info@crefc.org.

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CRE Securitized Debt Update

July 21, 2026

Private-Label CMBS and CRE CLOs

Only one transaction priced last week:

1. CGCMT 2026-MFAM1, an $816.9 million all-multifamily conduit backed by 27 fixed-rate, five-year loans originated by Citigroup on 27 properties across 14 states. Top states are New York (21.2%), California (16.8%), Florida (14.2%), Michigan (9.5%), and Illinois (8.0%). The largest loans are a $65 million mortgage on the 168-unit Leo apartments in Chicago, a $54 million loan on the 192-unit Solterra at Civic Center in Norwalk, CA, and a $50 million loan on the 264-unit Edge at Novi in Novi, MI. Greystar is the B-piece buyer and is taking down Classes G-RR and J-RR to satisfy the transaction’s risk-retention requirement.

By the numbers: YTD 2026 private-label CMBS and CRE CLO issuance totaled $101.1 billion, up 19% from the $85 billion for the same period last year.

Spreads Hold Steady

• Conduit AAA and A-S spreads were unchanged at +70 and +100, respectively.
• Conduit AA, A, and BBB- spreads were unchanged at +130, +175, and +415, respectively.
• SASB AAA spreads ranged from +85 to +175 across property types and structures.
• CRE CLO AAA spreads were unchanged at +130/+135 (static/managed); BBB- spreads were unchanged at +300 for both.

Agency CMBS

• Agency issuance totaled $2.3 billion last week, comprising $1.2 billion in Fannie DUS, a $784.8 million Freddie K transaction, $288.5 million in Ginnie transactions, and $40.5 million in Freddie Multi-PCs.
• Agency issuance for YTD 2026 totaled $91.6 billion, 20% higher than the $76.2 billion recorded for the same period in 2025.
  

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New York State Data Center Ban

July 21, 2026

New York Governor Kathy Hochul (D-NY) just signed into law a one-year moratorium on the building of new hyperscale data centers in the State of New York. 

What they're saying: In the announcement, Governor Hochul noted that the increase in New Yorkers’ energy bills was a key reason to sign the data center moratorium:

Why it matters: Across the country, opposition to data centers is growing.

• The issue is quickly becoming a flashpoint in the 2026 midterms, with many seeing the support or opposition of data centers as a litmus test for candidates on the state and federal level.
  
• Many have called for a review of the impact data centers have on the environment, specifically the effect they have on the drinking water and utility bills for residents. Data centers also attract criticism due to their noise and size.

If moratoriums on data centers gain steam across the country and locations for data center construction become more scarce, it could heighten competition and increase costs.

• An increase in costs could affect data center financing across the industry.

What’s next: The State of New York is the first state to enact a data center ban. However, 14 other states have proposed or introduced legislation to ban or halt the construction of data centers. For a full list, please click here.

Please contact James Montfort (jmontfort@crefc.org) with any questions.

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Forums in Focus: Joint Transparency Initiative Targeting the SASB Market

July 21, 2026

To address the ongoing structural evolution of the CRE finance landscape, the Investment-Grade (IG) Bondholders Forum and the Issuer Forum recently convened a joint session aimed at enhancing reporting practices and transparency across the SASB market.

Acknowledging that the market requires data transmission frameworks that match its modern complexity, the two forums reviewed several primary operational areas to drive consistency, mitigate data friction, and explore the feasibility of establishing collaborative industry best practices.

Key Areas for Reporting Enhancement

• Data Room Standardization: To build efficiency during the pre-marketing and structural phases of a transaction, the Forums agreed to work towards developing a standardized checklist of feasible documents for SASB data rooms. While complete information is often subject to ongoing negotiations before a deal is finalized, establishing a consistent template—including baseline appraisal metrics, underwriting assumptions, and third-party reports—is intended to streamline due diligence.
• Capital Stack Reporting Clarity: For pari passu structures and loans with complex capital stacks, tracking distinct debt layers remains an operational priority. The forums noted that establishing a standardized format for reporting capital stack details is an objective they intend to work towards. The Issuer Forum noted that existing master tape data lines could potentially be converted into a consistent file type, while CREFC indicated that this standardized capital structure layout could be integrated as a dedicated tab within the existing reporting Annex to help investors accurately capture transaction metrics.
• Multi-Property Tracking and Releases: In multi-property SASB transactions, ensuring that investors receive timely visibility into asset releases and subsequent property-level financial metrics is critical. The IG Forum has agreed to work towards providing clear examples of transactions where property release tracking functions consistently, alongside examples where challenges persist. These case studies are intended to serve as a helpful baseline for productive engagement with the broader servicing community.
• Optimizing Financial Data Flows: Addressing delays in property-level financial reporting was identified as an area for joint focus, reflecting the broader industry push for timely, transparent, and consistent reporting. The forums discussed exploring the feasibility of potential measures, such as implementing system flags to denote when financials are received, which could help market participants isolate whether reporting delays stem from borrower-level data delivery or subsequent processing timelines. 
• Post-Modification Visibility: To maintain secondary market clarity, the forums highlighted that working towards standardizing the practice of posting completed loan modification documentation to trustee sites, once agreements are legally finalized, may support investor visibility. The forums warmth to this concept reflects a shared understanding that consistent access to updated loan parameters benefits the entire ecosystem.
• Consistent Fee Disclosure: The conversation also covered fee disclosure frameworks within SASB transactions. The forums discussed evaluating a potential, threshold-based approach to help ensure transparency is balanced, predictable, and consistent across the wider industry.

Next Steps and Collaborative Implementation

Moving forward, the initiative aims to transition into a broader, collaborative phase focused on assessing how potential enhancements might align with the technical and operational capabilities of key market counterparties:

• CREFC will work towards drafting a preliminary capital structure layout template for the Annex to gather initial, informal stakeholder feedback.
• The Issuer and IG Forums have agreed to work towards outlining a recommended baseline data room document checklist.
• CREFC plans coordinate a constructive dialogue with the servicing and special servicing communities to collaboratively review operational mechanics, with the goal of discussing how property release reporting, financial data tracking, and modification postings might be approached without creating undue cost friction or administrative burdens.
  

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Economy, the Fed, and Rates…

July 21, 2026

Economic Data & Labor Market

• June inflation finally broke lower, with an energy asterisk. Headline CPI fell 0.4% in June, the first monthly decline in six years, slowing the annual rate to 3.5% from 4.2% in May; core CPI was essentially flat on the month and eased to 2.6% from 2.9%. Falling gasoline prices did most of the work, though several core goods and services categories softened too – the caveat is that the energy relief behind the print is already reversing.
• The pipeline cooled without normalizing. Producer prices fell 0.3% in June, slowing headline PPI to 5.5% year over year from 6.0% on a 12% drop in gasoline, while core PPI rose 0.2% on the month and truck-transportation costs remain up 16% from a year ago. Import prices unexpectedly rose 0.3% (7.1% year over year) as nonpetroleum prices gained 0.5%; the import index excludes tariffs and freight, so landed costs are higher still.
• June PCE, due July 30, should keep the Fed on hold. Bloomberg Economics estimates headline PCE fell 0.07% in June, lowering the annual rate to 3.7%, with core PCE up 0.18% and easing to 3.3% from 3.4%. One-month annualized core inflation would run near 2.2%, consistent with target, but the three- and six-month trends of roughly 3.1% and 3.8% are not; the Dallas Fed trimmed mean, a measure Warsh favors, is estimated near 2.2%.
• The consumer is stronger than the retail headline. June retail sales rose 0.2%, but a 5.3% drop in gasoline-station receipts masked a 0.7% gain excluding gas and a 0.5% rise in the GDP-linked control group – a 9.2% annualized second-quarter pace that points to real consumer spending above 2.0%. University of Michigan sentiment jumped to a five-month high of 54.4 with one-year inflation expectations down to 4.2%, though more than 70% of responses predate the renewed strikes on Iran, so the rebound likely overstates current household comfort.
• Labor is steady while factories stall. Initial jobless claims fell 8,000 to 208,000 in the week ended July 11 and continuing claims eased to 1.81 million, signaling little layoff pressure. Factory output was unchanged in June for a second stagnant month, led lower by machinery and electrical equipment, even as purchasing-manager surveys and earnings commentary point to a broadening industrial recovery.

Federal Reserve Policy

• July 28–29 is a hold; the argument is about the next hike. Cool June inflation removed the urgency, but the June dot plot showed nine of 18 officials penciling in at least one 2026 rate increase, six of them more than one, versus none in March. Markets assign better-than-even odds to a September hike and price nearly two quarter-point increases by April 2027 – the debate has moved decisively from easing to whether disinflation arrives fast enough to prevent tightening.
• Warsh talked like a hawk and committed to nothing. Across two days of testimony, the chairman said the Fed has “no tolerance” for elevated inflation after 63 months above target and pledged to end it, while declining to signal any rate move, consistent with his rejection of forward guidance. He also favors a materially smaller balance sheet and argued the AI build-out is inflationary now because its demand is arriving ahead of its eventual supply benefits.
• The hawks moved from the edges to the center. Dallas’s Lorie Logan became the first official to call outright for “modestly higher” rates, Cleveland’s Beth Hammack and Kansas City’s Jeff Schmid pressed the too-high-for-too-long case, Governor Christopher Waller drew his line at core PCE persistently above 3%, and Vice Chair Philip Jefferson said the stance may need reconsidering if inflation does not cool soon. New York’s Williams and Chicago’s Goolsbee counseled patience – setting up potential dissents and a genuinely live September decision.
• Measurement is becoming a policy variable. Bloomberg Economics finds inflation expectations anchored for markets and professional forecasters but least anchored for households, whose long-run views are elevated and the most responsive to near-term news since the early 1980s. Separately, BEA methodology changes to software, investment-management, and legal-services prices, effective with the September 30 release, are expected to trim measured core PCE by roughly 0.2 percentage point – a statistical fix, not actual price relief, but one that could sway a divided committee.

Treasury Yields & Bond Markets

• Yields ended the week close to flat, with a familiar twist. The 2-year eased 3 bps on the week to 4.18%, the 10-year slipped 1 bp to 4.55%, and the 30-year rose 1 bp to 5.07%; the 3-month/10-year spread narrowed to 75 bps from 78 bps, while the 10-year/30-year spread widened to 52 bps from 50 bps. Softer inflation data helped the front end; renewed Iran risk, diesel costs, and hawkish Fed rhetoric kept the long bond above 5%.
• The front end still prices tightening; floating relief has stalled. At 4.18%, the 2-year sits 43 bps above the 3.75% upper bound of the Fed’s target range and 28 bps above its year-ago level, while 1-month Term SOFR edged up to 3.67% – down 68 bps from a year ago but no longer falling. Markets are not pricing an aggressive cycle, just meaningful odds of at least one increase.
• The long end is a supply-and-structure story. The 10-year and 30-year sit 10 bps and 6 bps above year-ago levels, and the 30-year/10-year gap has widened to roughly half a point from about 0.2 in early 2025. The WSJ details why: roughly $2 trillion a year of added issuance is meeting a buyer base in which price-insensitive holders own about 52% of Treasuries (75% in 2007) and dealers absorb just 10–15% at auction versus 40–50% in 2010 – a structure that sustains elevated long-term yields regardless of the Fed’s next vote.

Dollar, Commodities & Market Dynamics

• Hormuz is back, and diesel is the channel to watch. With U.S.–Iran strikes running daily through July 17 and the interim peace deal declared over, tanker traffic through the Strait has dwindled and Brent has held in the mid-$80s. U.S. retail diesel is back above $5 a gallon, up more than $1.30 from last July, as Russia’s diesel-export ban makes the U.S. the world’s supplier of last resort; the pass-through runs via trucking, construction equipment, agriculture, and cold-chain food distribution, with food-price effects building into 2027.
• The dollar gets hawkish support, with limits. Bloomberg Intelligence sees Warsh’s testimony aiding the dollar through both rate and credibility channels, but softer U.S. data and stretched positioning cap the move – markets price roughly 39 bps of hikes by mid-2027 before easing talk returns.
• The AI trade hit its monetization test. Usage-based pricing is replacing flat fees across AI services – the end of the token subsidy, in BCA Research’s phrase – pushing usage toward cheaper, often Chinese open-source models just as Moonshot’s Kimi K3 reportedly rivals top U.S. systems. Morgan Stanley sees hyperscaler capex reaching $1.2 trillion next year across just five companies while free cash flow shrinks and Meta explores selling excess compute; equities noticed, with the Nasdaq down 2.9% on the week to 25,520 (S&P 500 7,458; Dow 52,146) in a chip-led selloff.
• Yet AI’s real-economy contribution may be understated. Bloomberg Economics calculates that, adjusted for quality gains the official deflators miss, AI added 1.33 percentage points to 2025 real GDP growth – 2.5 times the official 0.53 – with AI-adjacent investment at 8.3% of GDP, above the dot-com peak. That tension – real output gains, contested investor returns – now defines the cycle.

Policy & Politics

• Fiscal arithmetic keeps leaning on the long end. The deficit is running near 5.7% of GDP (the FT pegs it around 6%), interest costs are still climbing, and Treasury Secretary Bessent’s 3% deficit target is slipping out of reach after court-ordered tariff refunds dented revenue. The FT’s Long View expects bond-market patience to snap within a year; timeline aside, the direction reinforces structurally higher long-term yields.
• Data integrity stays on the watch list. The BEA’s PCE revisions are procedurally routine, but incomplete disclosure of the new formulas, at a moment of heightened sensitivity about political interference in statistics, has raised eyebrows among economists – and November midterms add a political overlay to any autumn Fed action.

CRE Finance Market Implications

• Rate volatility is a standing execution cost. A no-guidance Fed, a split committee, and a live war widen risk premiums around data releases and FOMC dates, per Bloomberg Intelligence – raising cost and timing risk on Treasury locks, interest-rate caps, and CMBS pricing windows into the July 28–29 meeting and the fall.
• Energy has flipped from tailwind to operating-cost risk. June’s cheap gasoline supported retail sales, sentiment, and travel – World Cup visitors lifted New York hotel occupancy, per the Beige Book – but diesel above $5 pressures trucking-exposed logistics, grocery distribution, construction-equipment budgets, and food-service tenants into the second half.
• Multifamily demand support persists; supply signals are mixed. June housing starts jumped 19% to a 1.427 million annualized pace, driven by 5-plus-unit starts surging 76% from a weak May to a 513,000 rate – the highest in over three years – while single-family fell a third straight month and total permits slipped 3%. With 30-year mortgage rates near 6.6% in early July, elevated ownership costs keep would-be buyers renting – supportive for multifamily absorption even as high financing and construction costs keep new-project economics tight.
• Data centers stay the demand engine. Token-subsidy expiration, model commoditization, hyperscaler funding strain, and Meta’s excess-capacity sales argue for stress-testing utilization, rent, and residual assumptions and weighting tenant credit and contract structure over headline pipeline. The broadening industrial recovery supports logistics and manufacturing-adjacent demand, while cautious consumer commentary from PepsiCo and General Mills argues for conservative discretionary-retail underwriting.
  

You can download CREFC's one-page MarketMetrics, which includes statistics covering the economy and the CRE debt capital markets, here.

Contact Raj Aidasani (raidasani@crefc.org) with any questions.

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Reconciliation 3.0 Update

July 21, 2026

Last week House Republicans passed the instructions to begin the third reconciliation bill through the Budget Committee and will consider it on the House Floor this week. 

Why it matters: The reconciliation process allows certain spending priorities to pass the senate via a simple majority. The One Big Beautiful Bill and the more recent funding for ICE, customs and border patrol were passed via reconciliation. 

By the numbers: The instructions provide for $95 billion across the following committees: 

• Armed Services: $60 Billion
• Agriculture: $12 Billion
• Intel: $13 Billion
• Admin: $10 Billion

Go deeper: The framework includes a scaled-back version of the SAVE America Act, as well as funding related to the Iran war and farm aid. 

• While leadership is trying to move this swiftly, there are a number of issues that will impact this partisan package. 
• Fiscal hawks are upset that there are no “pay-fors’ for the package, defense hawks think the funding level is far too low, and some conservatives want the full SAVE America Act included.

The Senate picture is also complicated. Sen. Ron Johnson is taking over as Senate Budget Committee Chair following Sen. Lindsey Graham’s death and will now play a central role in shaping the reconciliation package. 

Some Senate Republicans are already criticizing the House approach as rushed and incomplete, arguing it does not include the White House’s full supplemental request or President Trump’s push for an additional $350 billion in defense funding

Contact David McCarthy (dmccarthy@crefc.org) with questions.

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Fed Chair and Vice Chair Highlight Supervisory Reforms

July 21, 2026

Last week, Federal Reserve Chair Kevin Warsh and Vice Chair for Supervision Michelle Bowman outlined the agency’s modernization agenda: Bowman via a speech at the Bank Policy Institute London Conference and Warsh before the Senate Banking and House Financial Services Committees. 

Warsh called supervisory reform potentially "as dramatic" as his monetary policy views and praised Bowman's work over the past year.

• Before the House Financial Services Committee the next day, Warsh went further on specifics, tying supervision reform to a broader push to keep the Fed inside its statutory lane.
• He also confirmed reputational risk has been "completely removed" from the supervisory dashboard.

Bowman, who chairs the Financial Stability Board’s Supervisory and Regulatory Cooperation Committee, encouraged bank supervisors to:

• Prioritize material risk;
• Tailor supervision and regulation by risk profile;
• Prioritize transparency and accountability in regulatory and supervisory processes; and
• Support responsible innovation. 

Other Key Themes

• Capital: In reference to the proposed Basel capital framework, Warsh said he's weighing public comments alongside "strong capital ratios, strong liquidity ratios, strong supervision, and strong market discipline" as the ingredients of safety and soundness. 
• Tailoring: Warsh rejected a "one-size-fits-all" approach and argued that community banks and agricultural lenders are best served with tailored oversight.
  • Bowman's speech framed this identically: a community bank should not be regulated like a multi-trillion-dollar global institution.
• Asset thresholds. Bowman said the Fed is working to index static fixed-dollar thresholds to economic growth and inflation, so banks do not drift into heavier regulatory tiers purely from nominal growth.
• Coordination over unilateralism. Both officials emphasized working jointly with the FDIC and OCC. Warsh specifically flagged the GENIUS Act stablecoin rulemaking deadline as an area where he wants a single, unified interagency proposal rather than separate rules.

Warsh also faced pointed questions about a Bank of America dinner Bowman attended during an FOMC blackout period, now under Inspector General review. 

• He responded that he has deliberately avoided looking into this event to avoid compromising the IG's review
• According to American Banker, Bowman stated in writing that she stayed within ethics rules and did not discuss monetary policy during the dinner. 

CREFC will continue to closely monitor important regulatory developments at the Fed and other relevant regulatory developments. 

Contact Sairah Burki (sburki@crefc.org) with questions.

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Introducing CREFC Signal: A New Podcast from the CRE Finance Council

July 16, 2026

We're excited to introduce CREFC Signal, a new podcast from the CRE Finance Council featuring timely conversations with leaders across the commercial real estate finance market.
  
Through expert perspectives and real-time insights, CREFC Signal explores the forces shaping our industry—from market dynamics and capital flows to public policy, regulation, and emerging trends. Designed for CREFC members and the broader CRE finance community, each episode provides thoughtful discussion and practical perspectives on the issues influencing commercial real estate finance.

Our inaugural episode traces the evolution of the CRE Finance Council, from its founding through decades of market cycles to its role today as the leading voice of the commercial real estate finance industry.
  
Hosted by CREFC President & CEO Lisa Pendergast, the episode features past CREFC Chairs and industry leaders Leland F. Bunch (BofA Securities), Annemarie DiCola (Trepp), Chris Hoeffel (Counterpoint SRE), Rick Jones (Jackstay Ventures), Dan Olsen (KeyBank), and Patrick Sargent (Alston & Bird). Together, they reflect on the milestones that shaped the organization, the challenges CREFC helped the industry navigate, and the relationships that defined its growth.
  
From advancing market standards and advocacy efforts to fostering a connected and informed industry community, this conversation highlights the people, partnerships, and pivotal moments that built CREFC—and continue to shape its future.

Listen to the first episode today and subscribe for future conversations with the leaders shaping commercial real estate finance. 

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Economy, the Fed, and Rates…

July 14, 2026

Economic Data & Labor Market

• Inflation sits at a three-year high, but June should bring the first headline relief. May CPI held at 4.2% year-over-year, with core CPI at 2.9% and core PCE at 3.41%. Bloomberg Economics expects the June report (July 14) to show headline CPI falling roughly 0.1% month-over-month on a 9.2% drop in gasoline prices, easing the annual rate to about 3.9% and confirming May as this year’s peak, with core up a subdued 0.2% (roughly 2.8% year-over-year). The pressure points are rotating from energy toward memory-chip-driven electronics, elevated airfares, portfolio-management fees, and World Cup travel costs. Watch: June PPI follows on July 15, with the headline rate standing at 6.5% year-over-year.
• Consumers are refusing the price increases companies are trying to pass through. PepsiCo’s North American snack volumes were flat and organic revenue fell 2% after price cuts, even as management warned that fuel, packaging, and logistics costs will lift input-cost inflation in the second half; its international divisions all grew revenue at least 10%. U.S. households are still spending but trading down – limiting energy and tariff pass-through and squeezing corporate margins instead.
• The labor market is stable on the surface and stagnant underneath. Unemployment held at 4.2%, but the broader dashboard is soft: the share of consumers calling jobs plentiful keeps falling, the Atlanta Fed wage tracker continues to slow, service-sector employment surveys remain in contraction, small-business hiring plans are tepid, and JOLTS hires and separations describe a low-churn standstill. The Fed’s semiannual monetary policy report judged wage growth consistent with 2% inflation for the first time in five years – today’s inflation is not a labor-cost story, which strains the Fed’s usual analytical models.

Federal Reserve Policy

• The June minutes put a rate increase on the table without a consensus to move. A few participants saw a case for hiking at the June meeting, the committee viewed inflation risks as skewed to the upside, and nine of 19 officials penciled in at least one 2026 hike in the June projections. The underlying arithmetic: with the funds rate at 3.50%–3.75% and inflation running between 3% and 4%, the real policy rate is near zero – policy may be delivering stimulus the economy no longer needs.
• A July 28–29 hike is possible but not the base case. Markets entered the week pricing roughly a 24% probability of a July move and nearly 50 bps of cumulative tightening through April 2027. Bloomberg Economics counters that tightening into a supply-driven, likely transitory shock would trim inflation by only about 0.1 percentage point while adding roughly 680,000 to the unemployment rolls by 2027–2028, and expects the Fed to hold this year. Governor Waller – who led the case for last year’s three cuts – now says the risk balance has flipped entirely. Tuesday’s CPI and Warsh’s July 14–15 testimony are the immediate tests of whether July is live.
• Warsh’s no-guidance experiment is becoming a market variable of its own. Eliminating forward guidance is one thing; withholding the reaction function – how the Fed would respond to different inflation, labor, and growth outcomes – is what has investors and colleagues, Governor Waller included, publicly frustrated. Until the reaction function is legible, data surprises will produce outsized moves in Treasury yields and SOFR expectations. New York Fed President Williams offered one marker: monthly core PCE of 0.2% or less in the second half keeps policy on hold; persistently faster readings would require a response. He also named AI-driven demand – the one pressure interest rates can actually restrain – as his principal inflation concern.
• Institutional change is coming – task forces plus a PCE makeover. Warsh’s five task forces are led by fifteen credible, bipartisan heavyweights (Rajan, Stein, King, Fraga, Chetty, Mankiw, and Sargent among them), and the communications group is stacked with figures likely to recommend replacing the dot plot with a scenario-based quarterly report. Separately, the BEA’s September update to PCE methodology could have lowered measured core inflation by roughly 0.1–0.3 percentage point had it applied to current data – a timely assist for officials who want to stay on hold.

Treasury Yields & Bond Markets

• The selloff ran across the entire curve. Per Bloomberg: the 2-year rose to 4.21% from 4.14%, the 10-year to 4.56% from 4.48%, the 30-year to 5.06% from 4.99%, and the 3-month to 3.78% from 3.75%. Yields have risen for two consecutive weeks – for the 10-year, the largest two-week climb since May 2026 – leaving it up 21 bps from a year ago and roughly 10 bps below its 52-week high (May 19, 2026). The 30-year is back above the 5% threshold, up 19 bps year-over-year, and the 2-year sits within a few basis points of its own 52-week high.
• The curve steepened at the front, and real yields did the damage. The 3-month/10-year differential widened to 78 bps from 73 bps – a spread that stood at zero a year ago – while the 10-year/30-year gap held at 50 bps. The more consequential move is in inflation-adjusted terms: 10-year real yields reached an 18-month closing high near 2.3%, up roughly 40 bps year-to-date, and 30-year TIPS yields are at 18-year highs approaching 3%. Real yields are the discount rate for long-duration assets, and they are grinding higher even with last year’s three Fed cuts in the books.
• Floating-rate relief has stalled. 1-month Term SOFR ticked up to 3.68% from 3.67% and sits 66 bps below its year-ago level – but the descent has stopped, and with markets pricing net tightening into 2027, the forward curve no longer offers borrowers a credible near-term story of falling coupons.

Dollar, Commodities & Market Dynamics

• Hormuz is back as the dominant near-term macro risk. The U.S. and Iran exchanged fresh strikes over the weekend while issuing conflicting declarations on whether the Strait is open to shipping; Brent rallied about 5% at Monday’s open (July 13) toward $79 per barrel after WTI closed Friday at $71.52. Markets increasingly treat the Strait as a continuum rather than a binary open-or-closed question – the 1980s Tanker Wars template – which explains the muted pricing, but second-round inflation exposure runs through jet fuel, fertilizer, plastics, aluminum, and natural gas.
• The food-price channel is the sleeper risk. Fertilizer prices rose more than 30% early in the conflict – New Orleans urea touched $780 in mid-April – and a prolonged Gulf disruption layered on El Niño crop risks across Asia and Africa could keep food inflation sticky well after the energy impulse fades. For a Fed already debating a hike and an administration facing midterms, stubborn grocery inflation is the politically loudest kind.
• Equities are priced for perfection into earnings season. The S&P 500 rose to 7,575 from 7,483 and the Nasdaq to 26,282 from 25,833, while the Dow slipped to 52,637 from 52,900. Analysts have raised earnings estimates for all 11 S&P 500 sectors – a configuration last seen in late 2021, just before the 2022 rate shock and earnings recession – at the same time real yields sit at multi-year highs. Maximal expectations plus rising discount rates leave little room for disappointment when banks kick off reporting on July 14.

Policy & Politics

• The White House is trying to jawbone prices down. With inflation at a three-year high and 67% of polled voters disapproving of the administration’s cost-of-living record, President Trump has claimed credit for Walmart’s markdowns and told fuel retailers to target $2.50 per gallon – gasoline averages $3.88, roughly 30% above its level before the war began in February, and the conflict has cost the average household more than $500 in fuel. Targeted discounts may follow, but jawboning does not remove the underlying energy, tariff, and freight drivers – and economists across the spectrum warn the interventions distort markets in ways that outlast any administration.
• Japan is prodding capital home – a global long-end story. Tokyo announced it will push its large institutional investors, including the $1.6 trillion Government Pension Investment Fund, to bring money back onshore, triggering the largest one-day move in 10-year Japanese government bonds since last year’s tariff shock. A durable shift of Japanese capital homeward would remove a marginal buyer of global duration – Treasuries included – just as U.S. supply and term-premium concerns re-emerge.

CRE Finance Market Implications

• Both legs of the financing stack moved against borrowers. A 10-year at 4.56% – up 8 bps on the week and 21 bps year-over-year – directly pressures proceeds, debt-service coverage, and the refinancing math on 2026–2027 maturities, while 1-month Term SOFR at 3.68%, with markets pricing possible hikes rather than cuts, removes the floating-rate glide path many bridge and construction borrowers underwrote.
• Rate volatility is now a standalone execution cost. An opaque Fed reaction function plus a live geopolitical shock means wider swings around Treasury locks and hedges – a real cost for CMBS loan aggregation, conduit pricing, and borrowers deciding when to come to market. Expect wider bid-ask on both loans and bonds around Tuesday’s CPI-plus-testimony collision and again into the July 28–29 meeting.
• AI is simultaneously CRE’s strongest demand engine and a new cost channel. Meta committed an additional $40 billion to its Louisiana data-center campus, taking the site past $250 billion – emblematic of the capital wave supporting data centers, power infrastructure, and advanced manufacturing. But the same demand is driving unusually steep price gains in semiconductors and electrical equipment, raising hard costs for any development budget that touches power or electronics and competing with the rest of CRE for labor, equipment, and capital.
• Consumer-facing assets warrant conservative underwriting. PepsiCo’s U.S. results are a clean read on stretched household budgets: needs-based and grocery-anchored retail remain better positioned, while discretionary retail, restaurants, and lodging stay exposed if fuel prices spike again or the low-churn labor market weakens further.
• Housing strain supports the multifamily demand channel, not multifamily economics. With the average 30-year mortgage at roughly 6.58% in early July, applications falling, and builder sentiment still depressed, elevated rates keep would-be buyers renting – supportive for apartment demand at the margin – even as skilled-trade shortages and elevated trucking spot rates keep development and operating budgets under pressure; builders themselves are tilting toward multifamily starts, particularly in the Northeast.

Sources: Financial Times; Bloomberg; Wall Street Journal; Dow Jones/Tradeweb.

You can download CREFC's one-page MarketMetrics, which includes statistics covering the economy and the CRE debt capital markets, here.

Contact Raj Aidasani (raidasani@crefc.org) with any questions.

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