U.S. Inflation Cools, But Hostilities Lift Oil Prices

Consumer inflation in the U.S. cooled off in June, offering Americans a reprieve before the resumption of military strikes in the Middle East lifted oil prices. The consumer price index was up 3.5% year-over-year, down from 4.2% a month earlier, as gasoline prices dropped from May. Core inflation fell to 2.6% from 2.9% after prices excluding food and energy were unchanged month-to-month. However, oil prices have recently traded near one-month highs amid reports of Iranian attacks on commercial vessels in the Strait of Hormuz and U.S. strikes on Iran. President Donald Trump also announced on July 13 that U.S. forces would reimpose a blockade of Iranian ports.

Another rise in oil prices has renewed the risk that energy costs will feed broader inflationary pressure, leaving central banks in a challenging position this summer. Federal Reserve Governor Christopher Waller said in a speech on July 13 that he would “need to see several months of lower readings” on core inflation to have confidence that it is trending downward. During a televised congressional hearing on July 14, Fed Chair Kevin Warsh told lawmakers: “There might be some that look at this morning’s data and say, ‘Oh, mission accomplished. Everything is swell.’ That is not my view.”

While the outlook for inflation and interest rates remains uncertain, outcomes in private credit tend to be more manager‑driven than macro‑driven. PGIM’s Dianna Carr-Coletta, Head of Non-Sponsored Middle-Market Direct Lending, offers perspective that cuts through the noise — helping advisors better understand where opportunities exist and how to navigate an increasingly complex lending landscape.