Global Credit Weekly

Looking ahead

June 20, 2025 | Amanda Lynam, Dominique Bly

Key takeaways

  • The June Federal Open Market Committee (FOMC) press conference signaled a clear wait-and-see approach, as Chair Powell pointed to the summer for incremental clarity on the path and persistence of goods inflation. He characterized the policy rate as “modestly restrictive” and pushed back against the premise that a near-term rate cut was warranted by conditions in the labor market, which he characterized as “cooling” but “broadly in balance,” with an unemployment rate that is still low by historical standards.
  • Additionally, during the Q&A, Chair Powell mentioned that business sentiment in some areas appears to be improving, noting that firms are “working their way through this” and the tone “feels much more positive and constructive than it did three months ago.” He also highlighted that while the low 1Q2025 GDP reading was “complicated” by an “unusual swing” in net exports (due to firms’ frontloading of imports), other metrics of economic activity such as private domestic financial purchases (PDFP) are tracking at a healthy level.
  • While not a Committee forecast, the refreshed quarterly Summary of Economic Projections (SEP) also provided some incremental insight into the FOMC’s reaction function. The median projections signaled a somewhat more challenging growth-inflation mix relative to the March SEP, as well as a higher terminal rate for this cycle. Overall, Chair Powell reiterated a preference to “wait to learn more” before making any adjustments (i.e., rate cuts) to the Federal Reserve’s (Fed) policy stance. As a result, we believe the next rate cut of this cycle (and the first of 2025) is unlikely to occur before 4Q2025.
  • For corporate credit investors, and given this monetary policy backdrop, we continue to emphasize the all-in yield and income opportunities within the asset class – as opposed to a potential total return ‘boost’ (to fixed rate credit, for example) from lower rates or tighter spreads. We also continue to favor selectively moving down in credit quality, as we discuss within.

Download full report

Sign up to receive BlackRock's credit insights

We partner with investment professionals and thought leaders across the firm to provide insights and analysis on global credit investment strategies.
bar graph icon

Authors

Amanda Lynam, CPA
Head of Macro Credit Research, Portfolio Management Group
Amanda Lynam, CPA, is Head of Macro Credit Research within the Portfolio Management Group. In this capacity, Amanda leads a team that generates differentiated investment strategy research across global fixed income, liquid corporate credit (IG, HY, leveraged loans) and alternative asset (private credit, real estate) markets.
Dominique Bly
Macro Credit Research Strategist, Portfolio Management Group
Dominique is a Macro Credit Research Strategist. Prior to joining BlackRock, Dominique was an Investor Relations professional at Neuberger Berman, specializing in Private Debt, and a Consultant at Accenture. Dominique received a Bachelor of Science in Business Administration from UC Berkeley Haas.

Sign up to receive BlackRock's insights on credit

Please click here to opt-in to receiving insight emails from BlackRock. Any data collected will be processed according to BlackRock's privacy policy. You may unsubscribe at any time.

*Required information | Read our Privacy policy

Thank you for reaching out!

A BlackRock representative will reach out shortly. In the meantime, explore our website to read insights on the markets, portfolio design and more.


Explore our insights hub