U.S. Treasury yields were generally unchanged last week as U.S. inflation data met expectations. U.S. Federal Reserve Chair Powell reiterated that the central bank doesn’t “need to be in a hurry to cut.”

Yields jumped as central banks hiked rates to historic highs – ushering in a new era for fixed income. We see higher yields persisting even if rate cuts are coming. 

U.S. Treasury yields declined as the U.S. Federal Reserve leaned modestly dovish at the March meeting. The central bank remains on track for rate cuts later this year, and financial markets interpreted this decision positively.

We remain constructive on higher-quality, dividend growth-oriented stocks. In our view, dividend growth companies tend to be supported by positive fundamentals, sustainable growth potential, healthy balance sheets, ample free cash flow, stable profit margins and management teams committed to returning capital to shareholders.

Central bank activity last week gave markets the thumbs up to stay upbeat. That keeps us pro-risk in our six- to 12-month tactical views as Q2 starts.