Yield Curves Flatten

G7 government bond yield curves significantly flattened in the first quarter as central banks signaled multiple policy rate hikes to come, says FTSE Russell’s ‘Canadian Fixed Income Insight Report for April 2022.’ The Bank of Canada increased its interest rates in March to return inflation towards its two per cent target. Long Canadian provincial, municipal, and conventional bonds were down in the quarter, ranking amongst the worst performers. Canadian real yields, however, bounced back above zero and unlike their peers elsewhere, have turned positive.