Good morning. It is Wednesday, July 1st, and this is Debt Desk.

Let’s start with the national morning brief before we move into commercial real estate and multifamily debt, because this morning the macro setup is coming from Washington, the courts, and the weather map all at once.

The biggest headline is out of the Senate. The Associated Press reported Tuesday, July 1, that Senate Republicans passed President Trump’s tax and spending bill with Vice President JD Vance breaking a 50-50 tie after a long overnight session. That matters for markets because the story now shifts from legislative suspense to the substance of what investors have to price. The debate is no longer just whether Republicans could get a bill through the Senate before the holiday. It is what the package means for deficits, growth support, and the long end of the Treasury curve if the House takes it up quickly. That fiscal backdrop has been hanging over rates for days, and now it moves into a more concrete phase.

The second major story is another sharp Supreme Court ruling. AP reported Tuesday that the court upheld birthright citizenship and rejected the administration’s effort to narrow it through executive action. For markets, the direct economic effect is limited, but the broader read-through is important. It reinforces that even in a period of aggressive executive action, the courts are still drawing meaningful boundaries. That matters because investors are trying to judge not just policy direction, but policy durability.

The court also handed down another nationally significant decision Tuesday, with AP reporting that the justices upheld state laws barring transgender girls and women from competing on female school sports teams. That ruling is not a debt-market story in itself, but it is part of the same wider political pattern. Social policy fights are continuing to run through the courts at the same time Congress is moving major fiscal legislation, and together they keep the national mood heated heading into the holiday week.

The other national story worth keeping in the lead is still the weather, and it remains more than just a lifestyle headline. AP reported Tuesday that dangerous heat is still gripping the eastern half of the country, with advisories stretching across a wide swath of the Midwest, Mid-Atlantic and Northeast. That matters because prolonged heat quickly becomes an economic story through power demand, utility stress, labor productivity, insurance assumptions and building operating costs. For real estate owners especially, extreme weather is no longer background noise. It is part of the operating statement.

And the wildfire story in the West remains active as well. AP reported Tuesday that officials identified the three firefighters killed over the weekend on the Colorado-Utah border, underscoring how severe the fire conditions remain. We have been carrying the insurance and resilience angle here, and it still belongs in the national frame. Every deadly wildfire week feeds directly into how investors, insurers and lenders think about property risk, reserves and long-run asset pricing.

So that is the national setup this morning. Washington is still moving markets through fiscal policy and court decisions, while weather risk keeps reminding everybody that physical disruption now reaches much more directly into expenses, underwriting and sentiment.

Now let’s turn to Debt Desk.

The first anchor is rates, and the latest official Treasury close is for Tuesday, June 30. The 2-year finished at 4.14 percent, the 5-year at 4.19 percent, the 10-year at 4.44 percent, and the 30-year at 4.91 percent. The latest official SOFR print available as of this run is 3.62 percent for June 29.

Compared with Monday’s official Treasury curve, that is a modest backup in rates, especially in the belly and the long end. The move from 4.38 to 4.44 on the 10-year and from 4.86 to 4.91 on the 30-year is not a panic move, but it is enough to remind borrowers that fiscal headlines and quarter-turn positioning can still make term debt feel more expensive very quickly. The front end remains elevated too. With the 2-year at 4.14 percent and SOFR still at 3.62 percent, floating-rate carry remains real, and anybody hoping to buy time with bridge debt still needs a credible path to stabilization or takeout.

The curve shape matters here. The 2-year and 5-year are still close enough together to tell you the market is not pricing an easy glide path lower. Then the move from the 10-year to the 30-year still carries a meaningful term premium, which means very long-duration certainty continues to cost money. For borrowers, that creates a familiar but still difficult set of choices. Stay short and absorb expensive carry, or term out and pay up for certainty while the long end remains heavy.

That is why execution tone matters as much as headline rates right now, and the freshest read on that tone came from Connect CRE on June 30. CREFC’s Raj Aidasani described the market simply: capital is back, but it is selective. That is the best short description of the lending environment this morning. Capital is showing up, but it is still being disciplined by asset quality, business-plan clarity and sponsor credibility.

You can see that in the latest office refinance example. Connect CRE reported June 30 that Stonelake Capital closed a $135 million refinancing for Domain Tower 2 in Austin, with Barings providing the loan. That tells you a few things at once. It says balance-sheet and insurance-affiliated capital still wants high-quality, well-located office when the sponsorship and leasing story are good enough. It also says the office market is not broadly shut, but it is still reserving better execution for the cleaner deals.

On the multifamily side, Connect CRE reported June 30 that Citi provided $44.5 million for 194 East 2nd Street in Manhattan’s East Village, a 61-unit luxury apartment property with ground-floor retail. That is a useful read-through for both multifamily and the broader bank market. Banks are clearly still willing to compete for urban residential collateral when the asset has durable cash flow, limited supply pressure and a simple story. In that lane, borrower choice is better than it was during the most frozen parts of the cycle.

CMBS is also still in the conversation, but the freshest headline there is a reminder that the market remains two-sided. Commercial Observer reported June 30 that a $131.5 million CMBS loan backed by Moinian Group’s 2 Washington Street in Lower Manhattan was transferred to special servicing because of cash-flow issues. That is an important counterweight to the better refinance tone. CMBS is open enough to matter, especially for cleaner stories, but the legacy book is still working through stress, and poor operating performance still gets punished fast.

So when you stack those pieces together, the lender lanes remain pretty clear. Banks are competing on straightforward refinancings and better multifamily. Insurance capital is active where leverage is lower and quality is higher. CMBS remains available, but it wants clean stories and the market is still carrying visible distress in weaker collateral. Debt funds continue to matter where speed, transition risk, lease-up exposure or construction complexity push a deal outside the comfort zone of regulated lenders.

That brings us directly into multifamily, which again has the deepest financing bench in the market, even if every part of that bench is getting more disciplined.

The clearest fresh signal this morning is construction and refinance activity continuing across several different capital channels at once. In New York, the East Village Citi loan shows banks still like core urban apartments. In Westchester, Connect CRE reported June 30 that Walker & Dunlop arranged a $68.75 million fixed-rate, interest-only construction loan from Western Alliance Bank for Miroza Tower 4 in Yonkers. That matters because it is not just stabilized product getting financed. Purpose-built multifamily development still has access to construction capital when sponsors, submarkets and affordability dynamics line up.

Texas added two more useful multifamily reads on June 30. Connect CRE reported that Associated Bank completed a $50 million construction loan for Trinsic Residential Group’s Aura Brookview project in Flower Mound, and separately that JPI moved forward on its $113 million Jefferson Terry apartment venture in McKinney. The Flower Mound loan is the more direct debt signal, but together the two stories say the same thing: multifamily development is still moving where lenders believe demand is durable and the capital stack is not being asked to do anything heroic.

For HUD and FHA, the freshest concrete item is also from June 30. Connect CRE reported that Dwight Capital closed two HUD 223(f) refinance loans totaling $96 million for a pair of Corpus Christi apartment communities, including a $48.2 million loan on La Joya by Azali and a $47.3 million loan on Azali Heights. That is worth highlighting because it shows the FHA lane still doing exactly what it is supposed to do in this market. It is not the fastest money, but it remains highly relevant for stabilized multifamily borrowers looking to term out debt and repair the liability side of the balance sheet.

On the agency side, there was not a splashy same-day loan headline that matched those bank and FHA executions, but there was a fresh operating signal from Fannie Mae. Fannie posted a new multifamily lender letter dated June 30 announcing updated loan documents for commitments confirmed on or after July 28. That is not a market-moving headline by itself, but it is a reminder that the agency machine remains very active,...