U.S. Treasury yields rose again amid hawkish rhetoric from U.S. Federal Reserve officials and continued strong U.S. economic data.

U.S. yields began the year at their highest starting level since 2011, and they have since risen further across the Treasury and municipal curves.

U.S. Treasury yields rose again last week after U.S. inflation data surprised to the upside, sparking a reassessment of near-term U.S. Federal Reserve rate cuts. The market is now pricing only 1.8 total cuts this year.

First-quarter earnings season has kicked off with the utilities and communication services sectors projected to deliver the strongest year-over-year EPS growth, while estimates for materials and energy are expected to decline the most. 

U.S. Treasury yields rose on strong U.S. economic data, and spread sectors generally outperformed. The overall solid data further reduced expectations for near-term U.S. Federal Reserve easing, though markets still price the first rate cut for June.

Investors looking to lock in attractive yields ahead of eventual rate cuts while also positioning their portfolios to benefit when those cuts occur have expressed growing interest in how best to blend taxable and municipal fixed income assets to pursue these goals.

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.”

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.

U.S. Treasury yields rose last week on higher-than-expected U.S. inflation data. This trend suggests that inflation remains higher than the U.S. Federal Reserve’s target of 2%, decreasing hopes for rate cuts in the near term.

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