Global Credit Conditions Q2 2026: Narrow Strait, Broad Implications

We expect credit conditions to weaken in the next 12 months. We believe the war in the Middle East may be the catalyst that finally pushes the credit cycle--and the prolonged favorable financing conditions--to turn. The duration of the war will determine whether the deterioration is contained or broad. Even if the effective closure of the Strait of Hormuz eases in the coming weeks, the conflict to-date has neutralized expected upside pressures to growth.

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