Good morning. It is Tuesday, May 12, 2026, and this is Debt Desk.

We begin with the national picture, and this morning the macro backdrop is still being driven by the same story that carried into yesterday, but with a sharper consumer angle. The ceasefire effort with Iran is wobbling again, the Strait of Hormuz remains a source of supply anxiety, and Washington is now talking more openly about what higher fuel costs mean at home. The Associated Press reported Monday that President Trump said he wants to suspend the federal gasoline tax, but that he cannot do it on his own because Congress would have to approve it. That matters because the White House is no longer talking about energy as a distant geopolitical problem. It is talking about direct relief for drivers, which tells you the pressure from fuel prices has become immediate and political.

That feeds directly into the second national story, which is the China meeting now just ahead of us. AP reported today that Trump and Xi are preparing for their summit in Beijing on May 14 and May 15, with trade, Taiwan, and Iran all on the agenda. In other words, this is not just a ceremonial stop. Markets are looking at it as a meeting that could shape both trade policy and the diplomacy around Middle East energy flows at the same time. If the summit stabilizes the trade truce and gives the market any confidence that Beijing may help cool the Iran standoff, inflation pressure could ease at the margin. If it does not, then the market has to keep carrying both tariff risk and oil risk together.

A third story that moved Monday came from the Supreme Court. AP reported that the justices temporarily preserved current access to mifepristone while they consider whether to let new restrictions take effect. The practical point is that the court kept the status quo in place for now, with a further decision expected quickly. That is not a direct debt-market story, but it is a real national reminder that legal and political volatility remains high even while the market is trying to focus on inflation, energy, and rates.

There is also an important tone check from Wall Street. AP reported after the close Monday that the S&P 500, the Dow, and the Nasdaq all edged higher again, with the S&P finishing at 7,412.84 and the Nasdaq at another record, even as Brent crude pushed above 104 dollars a barrel. That combination is worth paying attention to. Equity investors are still willing to own growth and earnings, but the rates market and the real estate market do not have the same luxury. For borrowers, higher oil is not an abstract headline. It is another reason long-end yields can stay sticky even when risk assets look calm.

So that is the national setup this morning. Energy is still the biggest macro variable. The China summit is the next major policy catalyst. The Supreme Court is adding to the sense that Washington remains event-heavy. And stocks are telling you risk appetite has not broken, even though inflation risk clearly has not disappeared.

Now let’s move to the Debt Desk.

Start with rates, because this morning the curve matters even more than usual. The latest official Treasury par curve available at run time is Monday, May 11. According to the U.S. Treasury, the 2-year closed at 3.95 percent, the 5-year at 4.07 percent, the 10-year at 4.42 percent, and the 30-year at 4.98 percent. The latest official SOFR print available at run time was 3.60 percent for May 8, according to Federal Reserve Bank of New York data carried by FRED.

That curve says a few things at once. First, the front end is still not priced for an easy Fed pivot. A 2-year at 3.95 percent tells you the market still expects policy to stay restrictive enough that floating-rate debt does not get a quick break. Second, the long end remains the real challenge for commercial mortgages. A 10-year at 4.42 percent is workable, but not cheap, and a 30-year essentially sitting at 5 percent tells you term premium and inflation insurance are still very much in the loan quote. Third, SOFR at 3.60 percent means floating-rate borrowers are still paying real money before lender spread, reserves, or structure even enter the conversation.

That is why the execution tone remains selective rather than loose. The market is open, but only where the story is clean. Banks will still show up where they know the borrower, like the asset, and can see a clear refinance or hold path. Life companies are still the best fit for low-leverage, well-occupied assets where fixed-rate certainty is worth more than maximum proceeds. CMBS is open again, but it is demanding strong sponsorship and defensible cash flow. And debt funds continue to do the hardest work in the capital stack, especially on transitional, lease-up, and construction-heavy situations.

The freshest multifamily execution in the last 24 hours came out of Houston. Commercial Observer reported Monday at 11:41 a.m. that KeyBank provided a 54 million dollar fixed-rate refinance for Lakeview at Westpark, a 298-unit multifamily property in Richmond, Texas. The loan carries a 35-year term at 5.3 percent, and the structure turned a floating-rate bridge position into HUD financing through a local housing finance corporation setup. That is a very useful deal to watch because it captures several live themes at once. A bank is involved, but it is not stretching into speculative risk. The takeout is long-duration and more defensive. And the borrower is moving from floating-rate exposure toward certainty at a time when the market still does not trust the long end to rally cleanly.

If you zoom out from that one deal, the lender buckets are still behaving in very recognizable ways. The latest broad spread read from CRED iQ, published April 20 using first-quarter data, still puts multifamily permanent spreads around 154 basis points over the 10-year Treasury, life company quotes around 170 basis points at moderate leverage, and CMBS conduit pricing near 250 basis points. Those numbers are not same-day market color, but they remain the latest broad comparative map available. And the map still says the same thing the new deals say: multifamily is getting the best treatment, life companies remain disciplined, and conduit is available but not forgiving.

CMBS also has a live proof point on the board. Commercial Observer reported on May 7 that Soloviev Group landed a 1.8 billion dollar CMBS refinance for 9 West 57th Street in Manhattan, led by Bank of America and slated to enter the CMBS market in late May. That is office rather than apartments, but it matters for debt-market tone because it shows securitized execution is available for large, trophy assets with real leasing momentum. It does not mean conduit has become easy. It means the market will finance size and quality when the collateral story is strong enough.

On the debt-fund side, private credit still looks like the most flexible and in some cases the most necessary capital in the market. Commercial Observer reported on May 7 that S3 Capital closed a multifamily-focused lending fund with 1.3 billion dollars of investable capital and roughly 4.3 billion dollars of expected origination capacity, centered on first-lien construction lending in supply-constrained markets. That is important because it tells you private credit is not just hanging around to rescue troubled capital structures. It is still raising large pools of money specifically to finance housing where traditional bank construction lending has thinned out.

Now narrow the focus to multifamily, because this is still the deepest part of the property-level financing market, even if it is not an easy one.

The Houston KeyBank refinance is the newest datapoint, but it also fits a broader pattern we have been tracking. Multifamily remains the property type where borrowers can still choose among several viable lanes, even if each lane comes with a different tradeoff. Banks are back where the relationship is strong. HUD and FHA remain the answer for borrowers willing to trade speed for amortization, duration, and certainty. Debt funds are still critical for construction, bridge, and lease-up risk. Freddie Mac and Fannie Mae remain central to the market’s plumbing, especially around smaller workforce deals and securitization liquidity, even when there is not a brand-new agency headline every single day.

On the Freddie side, one recent development still matters because it affects how smaller deals may get financed over the rest of this month. Freddie Mac Multifamily said on April 15 that it launched an integrated conventional small product for loans from 2 million to 10 million dollars, aimed at giving Optigo lenders a more streamlined fixed-rate execution with competitive pricing and index-lock access. That was not a last-24-hours story, so it is background rather than today’s headline, but it reinforces the point that agency capital is still very focused on the smaller-balance workforce segment even while the broader market remains choosy.

On the Fannie side, the newest useful signal is still the May 6 announcement that certain multifamily mortgage-backed securities backed by credit-facility loans are now eligible for resecuritization. Again, that is not a borrower-facing headline in the way a big refinance is, but it matters for market function. When Fannie gives investors more flexibility around resecuritization, it supports liquidity deeper in the capital-markets chain. For borrowers, better secondary-market function tends to show up later as steadier execution and more reliable appetite from the lending channel.

The caution flag in multifamily remains CMBS credit performance. Trepp’s April delinquency report, published on May 4, showed the overall CMBS delinquency rate easing to 7.54 perc...