#bond-yields

#bond-yields

The European Central Bank has kept interest rates on hold, despite inflation rising to an estimated 3.0% in April 2026, driven primarily by energy prices.

The Bank of Canada said it was holding its key interest rate at 2.25 per cent on Wednesday. The bank was widely expected to look past the high cost of energy brought on by the war in Iran and hold rates.

Firm Treasury yields could continue to weigh on the metal amid ongoing inflation concerns. Lingering tensions in the Strait of Hormuz could continue to push oil prices up, reinforcing inflation concerns and weighing on bullion.

TLT holds U.S. Treasury bonds with remaining maturities greater than 20 years, collecting fixed semi-annual coupons that are passed through as monthly distributions.

The iShares U.S. Treasury Bond ETF holds only U.S. Treasury notes and bonds across the maturity curve, providing the cleanest expression of flight-to-quality stability in a single ticker. Credit risk is effectively zero because every holding carries the full faith and credit of the U.S. government.

"Oil prices are higher again this morning, but Treasury yields are lower as the risks to economic growth begin to take precedence over the risks to inflation," Oxford Economics said in a note on Monday.

SPTI holds U.S. Treasury securities in the intermediate maturity range, offering a 3.76% dividend yield and an expense ratio of just 0.03%, making it one of the cheapest ways to own Treasury income.

HYBL attempts to solve the income problem by combining senior loans, high-yield corporate bonds, and debt tranches from U.S. collateralized loan obligations (CLOs). The result is a portfolio with lower duration and lower volatility compared to traditional high-yield funds, while still targeting high current income with monthly distributions.

In my view, interest rates are more likely than not going to head lower over the course of 2026 and into 2027. I'm not saying we're due for a pandemic-like selloff, but I do think that weakness in the labor market is likely more protracted than the government data suggest. As such, I do think the makeup of the Federal Reserve, and which way many of its presidents and voting members lean (toward providing support for the labor market over battling inflation) could lead to much faster rate cuts than many think.

Crude oil breaking above the USD 100 threshold has revived inflation concerns, pushing US Treasury yields higher across the curve. However, Friday's labour market report revealed a significant deterioration in employment conditions, with the economy losing 92,000 jobs in February, its largest contraction in several months.