CarMax gains after management initiatives lead to higher profits
CarMax gains after management initiatives lead to higher profits
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Gold falls amid rising oil prices and higher US dollar | Business and Economy News
Gold hits seven-week low; silver follows suit and records a nearly 5 percent loss.
Published On 28 Sep 2026
Gold prices are falling as concerns of rising fuel prices stoke inflation worries on the back of the war between the United States and Iran.
Spot gold prices fell by 3.3 percent to reach a more than seven-week low at $4,146.51 per ounce on Monday.
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Rising oil prices, a higher US dollar and Treasury yields stoked inflation concerns, creating further headwinds for the metal.
This is the lowest level for gold values since August 5. US gold futures also fell by 3.3 percent to $4,178.40.
Although gold is traditionally considered an inflation hedge, higher interest rates dent its appeal as investors prefer yield-bearing assets.
“There might be no notable direct impact on regular people due to that. However, investors who had turned to gold will see a hit, especially under the current high inflation rates,” Sherif Othman, CEO of the Maryland-based Poise Investment Advisors, told Al Jazeera.
“Gold does not yield interest, so when Treasury yields go up, investors turn away from gold, impacting its value”, he added.
The Fed lifted benchmark rates by a quarter percentage point earlier this month and flagged that at least one more hike is likely in the coming months.
The US dollar was steady near a two-month high, and oil prices spiked about 3 percent as US President Donald Trump rejected an Iranian offer to resolve the conflict and reopen the Strait of Hormuz.
Such factors triggered several policymakers to warn that inflation risks remain elevated and that interest rates may need to rise, with Cleveland Fed President Beth Hammack among the latest officials to reiterate that view.
Higher Treasury yields and the US dollar are “creating a perfect storm to push the metals prices sharply lower,” according to Jim Wyckoff, a market analyst at American Gold Exchange.
Spot silver also fell by 4.7 percent to $61.27 per ounce, platinum declined 2.9 percent to $1,726.30 and palladium lost 4.4 percent to $1,211.45.
Private Credit Fees Tick Higher
Investors, though, continue to debate the true cost of owning private credit funds.
This article appears in the September 2026 issue of Global Finance Magazine.
For the first time since the Covid-19 pandemic, private credit’s headline management fees are returning to historical norms.
According to data analytics firm Preqin’s latest fund-terms report, direct-lending funds raised in 2025 charged a mean management fee of 1.42% and a median of 1.50%, essentially matching the asset class’s long-term 2005-2025 averages of 1.43% and 1.50%, respectively.
That marks a sharp reversal from the post-pandemic doldrums, when managers cut prices to compete for a shrinking pool of investor capital amid weak fundraising and slow distributions. The median fee on direct lending funds fell to just 1%, and the mean sank to historic lows of 1.25% to 1.32%.
Now, competition for capital appears to be easing at the top of the market, while headline prices tick higher. However, beneath the headline numbers, what investors are paying is a more complicated matter.
“The headline management fee tells you very little about what investors actually pay,” said Ludovic Phalippou, a professor of financial economics at Oxford University’s Saïd Business School. “I expect the true all-in cost to be very high.”
Chad Timko, senior investment officer at the Los Angeles County Employees Retirement Association (LACERA), one of the largest U.S. public pension funds, valued at $93.9 billion, made a similar point from the practitioner’s perspective: “How a manager pays for performance can be just as important as the performance itself.”
Pricing Power at the Top
The share of LPAs offering early-investor or large-commitment discounts also fell, from 41% of 2016-2018 vintages to 33% of 2022-2024 vintages. Source: Preqin’s Term Intelligence, data as of March 2025.
The reversal in headline fees isn’t happening evenly. Preqin’s data links it directly to performance. For funds raised between 2015 and 2019, top- and bottom-quartile managers charged nearly identical fees, averaging about 1.42%. For 2020-24 vintages, that changed; top-quartile funds held their fees near 1.42%, while fees in the lower three quartiles fell to between 1.24% and 1.29%.
Behind that split lies a market that has become sharply concentrated among a small number of managers. Two-thirds of all private-credit capital raised in 2024 went to the 20 largest funds, up from less than half in 2020, according to Preqin.
Average fund size has continued to climb for experienced managers, but first-time managers’ fund sizes have remained flat at roughly $120 million for five years. Fee discounts have followed the same pattern; the share of fund agreements offering early-investor or large-commitment discounts fell from 41% for 2016-18 vintages to 33% for the 2022-24 period, and the size of those discounts has also shrunk.
Some investors view the buildup of capital among top managers as a warning sign. Pension money pouring into private credit in recent years has “got out of hand,” loosening underwriting standards across the industry, said Mark Steed, CIO of the $25.8 billion Arizona Public Safety Personnel Retirement System. “There’s going to be a shakeout.”
Investor sentiment has grown more cautious even as realized results tick up. In Preqin’s most recent survey, 35% of institutional investors called private credit assets overvalued, up 16 percentage points year-over-year, and 37% expect performance to soften over the next 12 months, chiefly citing the path of interest rates.
Similarly, PwC’s 2026 global private credit survey identified ongoing fee competition among managers as a top concern heading into this year.
Capital concentration isn’t unique to developed private credit markets, either, though it takes a different shape elsewhere. India’s private credit market grew 35% year over year in 2025, to roughly $12.4 billion.
“Domestic funds represented over 64% of total deal value, pointing to the increasing depth of local capital,” noted Syed Hasan Jafar, vice dean of the School of Business and head of the Department of Finance at Woxsen University.
What Are Investors Really Paying?
Despite the recorded uptick in fees, it remains unclear whether investor expenses are moving along with the trend.
Preqin’s figures track the headline contractual management fee rate written into a fund’s limited partnership agreement (LPA) at formation: not fund expenses, fee offsets, transaction and monitoring charges, or, in newer semi-liquid vehicles, fees calculated on NAV rather than committed capital.
“We still do not have a reliable measure of total expense ratios in private credit,” said Oxford’s Phalippou. The problem is structural, he said. “Private credit has essentially inherited the same fee model as private equity, so the transparency problems are very similar. In semi-liquid products, the situation can actually be worse because some fees are calculated based on NAV. That creates additional opportunities for gaming.”
Despite the increase in headline fees, alternative investment adviser and fund manager Cliffwater’s 2025 survey of direct lending funds found total blended costs — management fees plus incentive fees and expenses — roughly flat or lower, not higher. Proskauer’s most recent private credit survey shows that commitment and arrangement fees — a separate one-time charge — continue to fall.
Neither Cliffwater’s nor Proskauer’s findings contradict Preqin’s data; they measure different metrics. Together, they suggest that while the sticker price at the top of the market is rising, what investors pay all-in remains unclear.
Resistance to trading private assets more openly “generally means your fee is above where it’s supposed to be, and you don’t want to shine a light on it,” said Apollo Global Management chairman and CEO Marc Rowan.
Oxford University
Phalippou is skeptical, in any case, that investors have much power to push back, regardless of which way headline fees move.
“The uncomfortable truth is that most LPs have very little negotiating leverage,” he said. “For the vast majority of investors, these are effectively take-it-or-leave-it contracts.” The result, he adds, is that fees persist “not because they have been negotiated, but because the market structure allows them to persist.”
LACERA addresses the problem by measuring “investor profit retention,” the share of investment gains it retains after all fees, rather than fixating on the headline management fee rate, Timko said. Because its capital bears the full risk of loss, LACERA expects “to retain a super-majority of the gains generated,” with manager compensation weighted toward a performance fee that pays out only above a hard hurdle rate of cash plus a spread, rather than a flat charge on committed capital.
It is, in effect, a bet that the real fight over cost in private credit is not about the sticker price but about how gains are split once they materialize.
Thomas Monteiro is a contributing writer based in Spain.
European markets open higher after Fed hike as US dollar hits seven-week high
Published on •Updated
Investors in Europe took the Federal Reserve rate hike in their stride.
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Both the Euro Stoxx 50 and the broader pan-European Stoxx 600 traded over 0.6% higher at the start of Thursday’s session.
France’s CAC 40, Germany’s DAX 30, Italy’s FTSE MIB, Spain’s IBEX 35, the Netherlands’ AEX and Switzerland’s CH20, all traded between 0.2% and 0.7% higher than their Wednesday close.
The UK’s FTSE 100 led the pack and rose more than 1%.
Carmakers and industrials led the Paris index, with Renault gaining more than 2%, Stellantis 1.6% and Schneider Electric 1.3%. Technology went the other way, with Dassault Systèmes falling 2.4%.
The calm followed a rougher session in New York, where the Dow Jones Industrial Average closed 1.2% lower on Wednesday and the S&P 500 fell 0.4%, while the Nasdaq was broadly flat.
Asian markets were mixed overnight with Tokyo’s Nikkei 225 rising 0.2%, Seoul’s Kospi gaining 0.9%, while Hong Kong’s Hang Seng lost 0.7% and the Shanghai Composite 0.4%.
Reactions were “pretty much expected since the rate hike was also in line with market expectations”, said Lorraine Tan, director of equity research for Asia at Morningstar, adding that the Iran war is likely to keep pressure on inflation.
A stronger US dollar and higher yields
The more consequential moves were in currencies and bonds.
The US dollar climbed to its highest in seven weeks against a basket of major currencies, lifted by the jump in short-dated Treasury yields that followed the decision.
The euro was trading around $1.146, down 0.5% from Wednesday’s open.
A stronger US dollar makes European exports more competitive in American markets, but it also raises the cost of anything priced in dollars, which includes oil and gas, which compounds Europe’s energy bill at a difficult moment.
In bond markets, the two-year Treasury yield, the maturity most sensitive to rate expectations, jumped to around 4.72% from 4.67% before the decision, holding near that level on Thursday.
The 10-year sat close to 5%, reflecting both the war-driven energy shock and mounting investor concern about American government debt.
Traders now fully expect another rate hike by December and put the odds of a move as soon as October at around 50%. Goldman Sachs became one of the first major Wall Street banks to forecast consecutive hikes, reversing its previous view that this month’s move would be the only one.
Attention turns next to the Bank of England, which announces its decision later on Thursday and is expected to hold rates steady, and to the Bank of Japan on Friday, where a hike is anticipated.
Additional sources • AP
ECB hikes rates to 2.5% as energy shock pushes eurozone inflation higher
Frankfurt has tightened again.
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The European Central Bank’s governing council lifted the deposit facility rate from 2.25% to 2.5% on Thursday. It is the second hike since 11 June, when the ECB moved for the first time in three years.
The ECB sets monetary policy for the eurozone through three key interest rates, with the deposit facility rate serving as its main policy benchmark.
The main refinancing rate was lifted to 2.65% and the marginal lending facility to 2.9%.
In its statement, the central bank noted that “the conflict in the Middle East continues to generate inflation pressures, and inflation is set to remain well above target for an extended period,” while ensuring that “with today’s decision, the Governing Council remains well positioned to navigate the uncertainty caused by the conflict.”
The ECB staff projections continue to estimate that headline inflation will average 3% this year. However, it has revised up the expectations for 2027 and 2028 to 2.5% and 2.1% respectively, compared with June.
An energy problem, not a demand problem
The decision follows an August inflation reading of 3.3%, up from 2.9% in July and the highest since September 2023.
Energy costs did nearly all the work, with energy inflation jumping to 14.3% from 10.3%, as fighting around the Strait of Hormuz kept crude supply constrained. The problem persists as Brent crude crossed $100 a barrel again on Wednesday due to renewed exchanges of fire between the US and Iran.
Underneath, the picture is calmer.
Core inflation, which strips out energy, food, alcohol and tobacco, actually fell to 2.4% from 2.5% in August, while services inflation, the component most sensitive to wages, dropped to 3% from 3.3%. There is still little sign that expensive energy is spreading into the rest of the economy.
That distinction has been central to the ECB’s own thinking.
In a paper published earlier this month, its economists found that adverse energy supply factors accounted for around 90% of the rise in energy inflation between January and May of this year.
“This time the energy supply shock dominates, while demand and public policy stimulus have minor roles,” the economists wrote, contrasting it with the 2021-22 surge that prompted a far more aggressive response.
A single rate for very different economies
The eurozone inflation average conceals a wide spread.
August inflation ran at 4.5% in Spain, 2.9% in Germany and 2.7% in France, three economies facing the same energy shock with markedly different outcomes.
Growth complicates matters further.
The bloc has held up better than expected, but resilience is not overheating, and even at 2.5% the deposit rate remains within the range the ECB considers neutral. Going further would mean deciding that policy must actively restrain the economy.
Christine Lagarde had signalled this move in July, when the council held rates but instructed staff to model oil and gas scenarios ahead of September.
“The burden of proof is on data,” Lagarde said then, adding that “the full inflationary impact of the energy shock has yet to play out.”
Thursday’s decision comes alongside fresh staff projections, though their cut-off date falls roughly two weeks before the meeting, meaning neither the latest leg higher in oil nor the surge in European government bond yields to 15-year highs will be reflected.
Attention now turns to Frankfurt’s peers.
The Federal Reserve will announce on 16 September and the Bank of Japan on the 18, with both expected to consider hikes of their own.
Meanwhile, the Bank of England will decide on 17 September and is expected to hold rates as it currently maintains a much higher benchmark than the rest at 3.75%.