In this episode, Simon and Daniel break down the sudden surge in bond yields and what it could be signaling about inflation, interest rates, and consumer stress. They start by looking at the latest Canadian CPI data and why inflation may not be fully reflecting the impact of higher fuel prices yet. Simon highlights key takeaways from Walmart, Lowe’s, and Home Depot earnings, including rising transportation costs, weaker DIY demand, and signs that lower-income consumers are becoming increasingly stretched. The discussion then shifts to the bond market, including the sharp rise in U.S. 2-year, 10-year, and 30-year yields, changing Fed rate expectations, and why markets may be pricing in more persistent inflation risk. Simon and Daniel also touch on Japanese government bond yields, the yen carry trade, and why a disorderly unwind could matter for global markets. They wrap up by connecting higher bond yields to the Canadian housing market, mortgage renewals, variable-rate risk, and the growing financial pressure facing homeowners as higher mortgage payments collide with rising food and fuel costs. Watch the full video on Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor Spotify - The Canadian Real Estate Investor Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense. See omnystudio.com/listener for privacy information.

Bond Yields, Inflation Pressures and the Consumer Squeeze

The Canadian Investor

# Full Transcript

**Podcast:** The Canadian Investor

## Transcript

[SPEAKER_A] Investing is simple, but don't confuse that with thinking it's easy. A stock is not just a ticker. At the end of the day, you have to remember that it's a business.

[SPEAKER_B] Just my reminder to people who own cyclicals, don't be surprised when there's a cycle.

[SPEAKER_A] If there's uncertainty in the markets, there's going to be some great opportunities for investors. This has to be one of the biggest quarters I've seen from this company in quite some time.

[SPEAKER_B] All right, welcome back. I think we're live for the— what is this, our 5th Friday?

[SPEAKER_A] Something like that.

[SPEAKER_B] Yeah, Friday Macro Lunch. It's funny, like last week we were like, oh yeah, we should just talk about bond yields. I mean, it seems like they're pretty, you know, like it's a story, but it wasn't like last week, it wasn't crazy. Like this week is absolutely nuts what is happening with bond yields. So talk to me a little bit about what we're going to be going through today.

[SPEAKER_A] Yeah, so obviously speaking of bond yields, we'll touch too on Canadian CPI came out earlier this week, probably not too long, but I think it fits in well. I also went over Walmart, Lowe's, and Home Depot's earnings. So not to go into too much detail for those, but just some big macro takeaways and what they're seeing, especially when it comes to fuel costs. But for you, obviously being in real estate, what they're also seeing on the homeowners spend, do-it-yourself renovation projects like that, especially obviously Home Depot and Lowe's. So that's a good indicator. And then looking at the bond market in general. So I think what we'll look at, U.S. bond yields, probably touch on the Japanese JGBs and probably look at the Canadian bond yields as well. See what's going, where that's going, what's causing it to rise. I mean, what's most likely causing it to rise. And I don't know if you looked at that recently, but the market's expectation for the Fed's fund rates has changed dramatically over the last couple weeks, over the last week.

[SPEAKER_B] Well, isn't it as like more likely to see a hike than a cut?

[SPEAKER_A] Yeah, yeah, exactly. That's it. Yeah.

[SPEAKER_B] So what do you use like CME Fed Watcher for that?

[SPEAKER_A] Yeah, I usually go on the CME FedWatch. I find that the tool is really good. So if—

[SPEAKER_B] Yeah, I'll pull that up.

[SPEAKER_A] Share my screen. Yeah.

[SPEAKER_B] If you have it. Yeah, go ahead. If you have it up.

[SPEAKER_A] Okay, so there you go here. And then the probabilities, I've like, this is the most. So yeah, I'll try to just to zoom that in a little bit so it's more visible for people. So yeah, basically what you're seeing is the further we get into the year, the more likely a rate hike is. Yeah, which is pretty crazy. And when you start getting to, well, I actually increased since I last looked at this this morning. So that just tells you ...

Bond Yields, Inflation Pressures and the Consumer Squeeze

Transcript

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Every day you wait, your competitors are finding
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Bond Yields, Inflation Pressures and the Consumer Squeeze

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.