Volatility returned in August, with markets plummeting early in the month on concerns about the health of the U.S. economy, combined with a more hawkish-than-expected statement from Japan’s central banks that prompted the unwinding of the U.S. dollar/yen carry trade. In the loan market, the average price on broadly syndicated loans (BSL) dropped 56 basis points on August 5 to a year-low 95.84. It was the sharpest drop in the BSL market since March 2023, when investors reacted to the failure of Silicon Valley Bank.