Credit conditions look set to steadily improve, but the forthcoming U.S. elections could create some financial market volatility and policy uncertainty. Financing costs could remain overly burdensome for some borrowers, especially those at the lower end of the ratings spectrum, if monetary-policy easing is derailed or risk aversion increases. Cost pressures could persist, threatening to hurt credit. The region’s net outlook bias, indicating potential ratings trends, has improved to negative 9.2%. We expect the U.S. trailing-12-month speculative-grade corporate default rate to fall to 3.75% by June 2025.