Canadian Mortgage Rates May Climb As Bond Yields Hit 2010 High
Bank of Canada’s core inflation is easing, yet long‑term Government of Canada bond yields have surged to their highest level since 2010, with the 30‑year benchmark briefly topping 4.05%. BMO attributes the jump primarily to rising oil prices, even as the 5‑year yield climbs toward multi‑year highs. The higher benchmark translates into costlier borrowing for mortgages, REITs, developers and small businesses. At the same time, interest‑service obligations are set to consume a growing share of federal revenue, raising concerns about a structural drag on growth.
Peace Deal Rumors Make For Mid-Day Reversal
Bond markets opened slightly weaker after headlines that Iran would retain its nuclear material, pushing the 10‑year Treasury to 4.62% and mortgage‑backed securities (MBS) down a quarter point. Around 1 pm, rumors of a draft Iran peace agreement sparked a rapid...
10-Year TIPS Auction Gets Real Yield of 2.169% to Soft Demand
The U.S. Treasury’s 10‑year Treasury Inflation‑Protected Securities (TIPS) auction posted a real yield of 2.169%, signaling softer demand than in recent weeks. The higher yield suggests investors are pricing in elevated inflation expectations despite modest auction participation. Financial advisers continue...
Debt, Inflation, and Populism Renewed Inflation and Is Killing the Bond Market
The Federal Reserve is expected to keep rates steady as inflation remains above target and the U.S. fiscal deficit swells to an unprecedented 6.2% of GDP through 2026. Treasury yields have surged, with the 30‑year hitting a 19‑year high of...
What To Own Before A Bond Market Crisis
U.S. Treasury yields are climbing as deficits swell and foreign investors pull back, reviving concerns about a potential bond market shock. While a full Treasury crisis remains unlikely, the loss of overseas demand could strain liquidity and push rates higher....
Sources: ECB Rate Hike Very Likely in June
Eurozone policymakers are converging on a June rate hike as inflation remains anchored above target, driven by persistently high energy costs. While the ECB is likely to raise rates in June, officials are reluctant to pledge a July increase, preferring...
The Long Spiral.
A sharp selloff in government bonds has pushed the 10‑year U.S. Treasury yield to 4.687%, its highest intraday level since January 2025, while the 30‑year note rose to 5.19%, matching a June 2007 peak. Analysts like John Authers warn that...
Term Premium Expansion: The Selective Capital Destruction Mechanism
The term premium—extra yield for long‑duration risk—has expanded as structural inflation pushes 30‑year Treasury yields above 5%, a threshold that many pension funds and insurers target. This rise occurs while short‑term rate futures stay flat, prompting a reallocation from high‑multiple...
Japan's 10-Year Bond Yield Hits 1996 High as Fresh Debt Plans Emerge. Extra Budget Coming
Japan’s benchmark 10‑year government bond yield jumped to 4.2%, the highest level since 1996, after a government source confirmed fresh debt issuance to fund a supplementary budget aimed at cushioning households from soaring energy costs linked to the Iran war....
What Does a Smaller Fed Balance Sheet Mean for Inflation & Interest Rates?
The Federal Reserve is considering a $2‑3 trillion reduction in its balance sheet, primarily by off‑loading the $2 trillion of mortgage‑backed securities (MBS) held in the SOMA. Treasury could respond by issuing longer‑duration debt, which would let the Fed keep short‑term rates...
Ten Year Nominal and Real Yields Jump
Ten-year nominal and real Treasury yields surged in early May, lifting the benchmark 30‑year mortgage rate by 38 basis points from its February low. The rise reflects heightened market expectations of tighter monetary policy and stronger inflation pressures. Mortgage rates...
Treasury Premium Climbs Again, Fueled by Sticky Inflation
The market premium on the U.S. 10‑year Treasury rose to 35 basis points in April, pushing the yield to 4.47%—its highest close since August. Sticky core inflation, especially in services, and a sharp jump in wholesale prices signal persistent price...
U.S. Treasury Auctions Off $58 Billion of Three-Year Notes at a High Yield of 3.965%
On Tuesday, the U.S. Treasury auctioned $58 billion of three‑year Treasury notes, yielding 3.965%, the highest in recent weeks. The auction’s bid‑to‑cover ratio slipped to 2.54×, under the six‑month average of 2.67×, and featured a modest positive tail of 0.6 basis...
UK Matching Adjustment 2025 Review: Gilt-Y Pleasures
The UK’s 2025 Matching Adjustment (MA) review highlights a growing appetite among life insurers for sovereign‑bond strategies, particularly UK gilts. Insurers are allocating a larger share of their MA‑eligible portfolios to government debt, while only a modest fraction are exploiting...
Do Voters Really Want to Pay for Public Schools?
Voters in Michigan approved a school bond while Ohio rejected a similar measure, each with a 64% vote. The Michigan bond will fund capital upgrades for special‑education facilities, underscoring the reliance on local property taxes for school construction. Simultaneously, states...