Federal Reserve Interest Rate Freeze Tests Gladstone Capital’s Road to Recovery

Gladstone Capital's portfolio is predominantly floating-rate, meaning its income rises and falls with the Secured Overnight Financing Rate (SOFR), the benchmark that replaced LIBOR and tracks closely with Fed policy. As the Fed cut rates twice in late 2025, Gladstone Capital's weighted average portfolio yield compressed from 13.9% in Q4 2024 to 12.2% by Q1 2026, a 170 basis point decline (each basis point equals one-hundredth of a percentage point, so 170 basis points equals 1.7%) that directly drove revenu ...