In this edition of the Lakemore Insights – July 2021 report, we review the way in which inflation concerns and the spread of the Delta variant of Covid-19 have begun to weigh on sentiment. With CLO equity arbitrage remaining at historical highs, warehouse activity is plentiful, and we anticipate any future volatility to further enhance CLO equity attractiveness.  Meanwhile, the loan market continues to be fundamentally strong, with the last twelve-month default rate falling well below 1% and upgrades soaring ever higher above downgrades.