Good morning. It is Thursday, May 14, 2026, and this is Debt Desk.

We start with the national picture, and this morning the first story is inflation again, but this time from the wholesale side. The Associated Press reported Wednesday that the producer price index rose 1.4 percent in April and 6 percent from a year earlier, the biggest monthly jump in more than four years. That matters because it tells you the pressure is not stopping at the gas pump. It is moving through the pipeline that businesses use to price everything else. When wholesale inflation heats up this quickly, it raises the odds that companies try to pass at least part of that cost through, which keeps the broader inflation story sticky even after a hot consumer-price report earlier in the week.

That inflation story connects directly to the second big national headline, which is President Trump's meeting with Xi Jinping in Beijing. AP's live coverage overnight framed the summit around three overlapping pressures: the Iran war, trade friction, and U.S. arms sales to Taiwan. For markets, the point is simple. This is not just a diplomacy story. It is a macro story. If Washington and Beijing can lower the temperature even modestly on trade and produce any signal that helps stabilize the energy picture, markets will take it as a step toward less inflation pressure. If the summit hardens positions instead, investors are left carrying tariff risk, oil risk, and inflation risk all at once.

A third national story worth keeping in view is the growing discomfort inside Congress over war powers. AP reported Wednesday that Senate Republicans again blocked legislation to halt Trump's war with Iran, but the resistance inside the GOP grew and Lisa Murkowski flipped. Even though the measure did not pass, the move matters because it shows the political coalition behind the current military posture is not locked in. The practical market implication is that Washington is still debating the legal and political durability of the conflict at exactly the moment when energy costs are feeding through to inflation and rates.

There is also a broader thread tying those stories together this morning. The country is now in a phase where foreign policy, fuel prices, and domestic inflation are no longer separate conversations. They are the same conversation. Higher energy costs are pushing inflation higher. Higher inflation is keeping rates elevated. Elevated rates are tightening financial conditions even in sectors where capital is still available. That is the backdrop for everything we are about to discuss on the debt side.

Now let's move to the Debt Desk.

Start with rates, because they are still the organizing fact of the commercial real estate market. The latest official Treasury par curve available at run time is Tuesday, May 12. According to the U.S. Treasury, the 2-year closed at 4.00 percent, the 5-year at 4.12 percent, the 10-year at 4.46 percent, and the 30-year at 5.03 percent. The latest published SOFR print available at run time was 3.60 percent for May 12, based on New York Fed-referenced market data available before this recording.

That set of numbers still says the same basic thing, but a little more loudly than it did a week ago. The front end at 4 percent tells you the market is not leaning into a fast easing cycle. The 5-year at 4.12 percent matters because it sits right in the part of the curve that many fixed-rate commercial mortgages reference conceptually, even when the actual loan coupon is built a little differently. The 10-year at 4.46 percent is the headline benchmark everybody quotes, but the 30-year at 5.03 percent may be the more important signal right now because it tells you long-duration capital still wants real compensation before it locks in.

In other words, this is not just a story about whether the 10-year is up or down. It is a term-structure story. The 2-year, 5-year, 10-year, and 30-year are all saying that money is still expensive across the curve, and that matters for execution. The 2-year influences floating-rate expectations and the path of policy. The 5-year shapes a lot of intermediate-duration mortgage math. The 10-year anchors conversation. And the 30-year tells life companies and other long-money lenders how comfortable they really are holding duration here.

For borrowers, that means the hierarchy of capital is still intact. Banks are lending, but they want a clean story, modest leverage, and low drama around sponsorship and business plan. Life companies are still highly relevant for top-tier stabilized assets, but they remain disciplined and selective, especially when the long end is pressing higher. CMBS is open, particularly for large, obvious, institutional-quality collateral. Debt funds remain the flexible part of the stack, and that flexibility still costs money.

The clearest fresh example on the general CRE side came from Manhattan. Commercial Observer reported Wednesday that Brookfield and the Qatar Investment Authority secured a $1.9 billion CMBS refinancing for 2 Manhattan West, with Wells Fargo leading the deal. That is a large, high-profile office transaction, and it matters for more than the asset itself. Back-to-back trophy office securitizations in Midtown tell you the CMBS market is not shut. It is discriminating. If a sponsor brings size, quality, location, and leasing credibility, the market can still absorb a very large execution.

That does not mean conduit or SASB buyers suddenly love every office building again. It means the market is willing to separate trophy collateral from everything else. For debt-market participants, that is an important distinction. A headline like 2 Manhattan West should not be read as a blanket reopening of office credit. It should be read as evidence that top-of-stack assets can still command deep capital even in a higher-for-longer rate regime.

The broader CMBS backdrop still argues for caution outside those top-tier stories. Trepp said last week that $2.57 billion of private-label CMBS loan balance reaches hard maturity in May 2026 and that $76.6 billion of hard maturities are due across the full year, with the pressure heavily back-loaded and office-driven. That matters because the securitized market may be functioning, but it is still sorting assets very aggressively. Performing collateral with a believable refinance path can move. Weak collateral with maturity pressure still has a much harder road.

Now bring that down from the trophy-office level to the financing tone most borrowers actually feel. Banks still look best where leverage is moderate and sponsorship is easy to underwrite. Life companies remain competitive on the cleanest stabilized deals, especially where long-term hold logic is clear. CMBS can work for larger, institutional executions. Debt funds continue to win wherever the business plan needs speed, lease-up tolerance, future funding, or a lender comfortable with transitional complexity. The price of flexibility is still elevated, but the capital is there.

Multifamily remains the deepest lane, and the freshest deal-level example came out of Florida. Commercial Observer reported Tuesday that Midtown Capital Partners secured $37 million from RMWC to build Astor Pointe, a 171-unit waterfront multifamily project in Palm Bay. The loan is a 24-month floating-rate construction facility that can step down in rate once construction is complete, and it will both retire existing construction debt and carry the project through lease-up.

That is a very useful transaction because it says two things at once. First, private and nonbank construction capital is still available for apartment projects that can tell a coherent absorption story. Second, the structure matters as much as the headline rate. A floating bridge or construction loan with step-down features is not cheap in absolute terms, but it can still be the right answer when the borrower needs flexibility more than maximum coupon efficiency.

This is also where the SOFR discussion becomes practical. With overnight SOFR still at 3.60 percent, floating-rate executions are no longer in the panic zone they occupied when benchmarks were materially higher, but they are not easy money either. Add spread, reserves, and the lender's view of lease-up risk, and floating debt still requires a borrower to believe in a very specific operating path. That is why many borrowers are still trying to refinance into longer-duration fixed-rate structures whenever they can.

Agency execution remains a major reason multifamily financing still feels more functional than the rest of commercial real estate. Freddie Mac's multifamily securities pricing page shows that its fixed-rate K-deal machine is still very active, including FREMF 2026-K179, which priced on April 28 and closed on May 7 with AAA A-2 bonds at swaps plus 32, and the five-year K560 transaction, which priced on April 21 and closed on April 30 with its A-2 class at plus 28. Those are not same-day headlines, but they are among the latest official agency execution points available and they confirm that the apartment securitization lane is still working.

Fannie Mae's latest official quarterly update points in the same direction. In its first-quarter 2026 multifamily earnings highlights, released April 29, Fannie said new multifamily business volume reached $17.1 billion in the quarter, financing roughly 110,000 rental units, with more than 80 percent of those units affordable to households earning at or below 100 percent of area median income. That is not a breaking-news item today, but it remains the latest broad official read on how deep the agency channel still is.

At the same time, the credit picture is not universally easy. The same Fanni...