designer491/iStock via Getty Images Inflation is the bane of the bond market. And it is now demanding multiple rate hikes, starting late this year. The 2-year Treasury yield jumped by 12 basis points on Friday, to 4.17%, the highest since February 2025, when it was on the way down. Back then, it was anticipating more rate cuts, which came in the fall that year - three of them. Now it’s anticipatin...
designer491/iStock via Getty Images Inflation is the bane of the bond market. And it is now demanding multiple rate hikes, starting late this year. The 2-year Treasury yield jumped by 12 basis points on Friday, to 4.17%, the highest since February 2025, when it was on the way down. Back then, it was anticipating more rate cuts, which came in the fall that year - three of them. Now it’s anticipating rate hikes - multiple rate hikes. Yields reflect the summary of the vast bond market’s diverse opinions. Since the end of February, the 2-year yield has jumped by 79 basis points, having switched from expecting a rate cut to expecting multiple rate hikes. It is now 54 basis points above the Effective Federal Funds Rate, an overnight rate that the Fed targets with its policy rates (blue in the chart). The trigger on Friday was the jobs report, which confirmed that the labor market was fine, with three months in a row of substantial job growth, including upward revisions of the prior two months, and with the three-month average job growth at the highest level since March 2024 (my analysis: Job Growth Turns Around Decidedly after Weakening for Years ). This labor market data indicates that the Fed can move inflation to the very top of its worry list. Both measures of consumer price inflation, the CPI and the Fed-favored PCE price index, will likely show that inflation was over 4% in May, double the Fed’s target, and above the Fed’s target for over five years. Inflation has been rising for months before the energy shock in March even hit, and has metastasized beyond the energy shock to other areas of the economy. Newly minted Fed chair Warsh is going to have a hard time over the next few months persuading a majority of voting members on the FOMC that a rate cut is needed in this environment, according to the Treasury market; and later this year, he may have a hard persuading a majority that a rate hike is not needed, according to the Treasury market. The 3-year Treasury yield...
Joe Mantello’s stark revival of Arthur Miller’s classic drama takes home six awards, while Ragtime and Schmigadoon! pick up musical wins Tony awards 2026: red carpet looks and the best of the show – in pictures Tony awards 2026: full list of winners A stripped-back take on Arthur Miller’s Death of a Salesman dominated this year’s Tonys, winning six awards, while Lesley Manville and John Lithgow to...
Joe Mantello’s stark revival of Arthur Miller’s classic drama takes home six awards, while Ragtime and Schmigadoon! pick up musical wins Tony awards 2026: red carpet looks and the best of the show – in pictures Tony awards 2026: full list of winners A stripped-back take on Arthur Miller’s Death of a Salesman dominated this year’s Tonys, winning six awards, while Lesley Manville and John Lithgow took home lead acting trophies. Death of a Salesman was named best revival of a play, with the award-winning director Joe Mantello praising Miller’s story as one that “still talks to us through time”. Star Nathan Lane accepted the award on behalf of the cast, and called it a play that “continues to teach us who we are as humans and Americans”. Continue reading...
Malaysia’s human rights groups have warned of rising hostility towards Rohingya refugees after a petition shared widely on social media calling for the community to be “removed” from the country amassed nearly half a million signatures. The petition, launched on Change.org late last month by an account using the name “Aku Anak Malaysia”, urges the Malaysian government to consider resettling the Ro...
Malaysia’s human rights groups have warned of rising hostility towards Rohingya refugees after a petition shared widely on social media calling for the community to be “removed” from the country amassed nearly half a million signatures. The petition, launched on Change.org late last month by an account using the name “Aku Anak Malaysia”, urges the Malaysian government to consider resettling the Rohingya in another country or providing “enhanced support in their home regions” in Myanmar. It...
kentoh/iStock via Getty Images Quarterly commentary Financial assets experienced mixed returns in the first quarter. The fund underperformed the benchmark. Asset allocation was the primary driver of the modest shortfall, while underlying manager performance contributed. Market review and outlook The world financial markets, after performing well in the first two months of the year on continued opt...
kentoh/iStock via Getty Images Quarterly commentary Financial assets experienced mixed returns in the first quarter. The fund underperformed the benchmark. Asset allocation was the primary driver of the modest shortfall, while underlying manager performance contributed. Market review and outlook The world financial markets, after performing well in the first two months of the year on continued optimism about trends in economic growth and interest rates, turned lower following the start of the conflict in the Middle East in early March. The ensuing spike in oil prices, together with concerns about possible shortages of other commodities caused by disrupted supply chains, dampened the growth outlook and led to a sharp rise in inflation expectations. The deteriorating inflation picture, in turn, dashed optimism that central banks could continue cutting rates. In combination, these developments led to a surge in global government bond yields that erased the positive total returns achieved in the first two months of the year. The conflict also fueled a sizable downturn in major global equity indexes in March, sending stocks into the red. With this said, the majority of the negative return for equities stemmed from weakness in the growth style in general, and mega-cap U.S. technology stocks in particular. Conversely, the value style, dividend payers, and more defensive companies generally produced positive returns, benefiting diversified investors. We're encouraged by the broadening of leadership away from the "Magnificent Seven" group of U.S. tech companies, as it provided a tailwind for our diversified positioning. Contributors and detractors The fund's modest underperformance was almost entirely due to its overweight position in equities and its corresponding underweight in bonds. On the positive side, we benefited from having an underweight in U.S. large caps in favor of an overweight in U.S. mid caps. Underlying manager performance contributed, highlighted by relativ...