Monthly Portfolio Statistics

Market Commentary

Clipping yield with a watchful eye

April calmed after March, but oil swings kept volatility alive. The Fed held rates and signaled higher-for-longer. Growth improved, inflation risks lingered, and we modestly extended to lock in yield.

Ceasefire calm, oil snaps back

April began with a welcome breather after March’s madness. A fragile US–Iran ceasefire around April 8 sent oil prices down from wartime highs, giving markets a rare chance to exhale. Money market nerves eased; you could almost hear traders whisper, “Maybe we won’t need that crisis playlist after all.” Alas, by late month the conflict remained unresolved, and oil shot right back above $100 per barrel, reminding everyone that geopolitics still had plenty of plot twists left. The energy-price whipsaw left its mark: gasoline was wildly more expensive than a month ago, and war headlines remained the top market driver. Still, compared to March’s frenzy, April’s war news had a bit less shock value.

Figure 1: Oil prices have shot back above 100$/bbl

Source: SSIM, as of April 30, 2026

Economy rebounds (sort of)

On the economic front, the US delivered a “good-news-but” scenario. The advance estimate of Q1 GDP showed roughly 2% annualized growth, a nice pickup after the near-flat Q4 2025 and even a partial government shutdown hangover. Consumers kept spending, and businesses engaged in some modest restocking. That’s the good news.

The “but” is inflation, which remains the uninvited guest who refuses to leave. March’s core inflation cooled only slightly—still well above the Fed’s comfort zone. And now that oil and gasoline prices have jumped post-conflict, inflation could enjoy a second wind come summer.

So while growth is holding up, it’s doing so in spite of some serious headwinds (not least, $5-a-gallon gas). The US jobs market, meanwhile, has stayed remarkably solid, with unemployment remaining at historic lows. Bottom line: the economy isn’t in recession mode by any means, but the war’s commodity shock is an added test of the “soft landing” storyline.

Fed holds steady amid leadership drama

In a month without the war, Washington gossip might have taken center stage: the Federal Reserve’s (Fed’s) April policy meeting was anything but dull behind closed doors. The Fed kept its target rate unchanged at 3.5%–3.75. But the subplots provided intrigue. Four Fed officials dissented. Three pushed to remove any hint of an “easing bias,” reflecting a hawkish wing worried that markets are too eager for rate cuts.

Fed Chair nominee Kevin Warsh wrapped up Senate hearings and solidified his path to confirmation, as the Department of Justice apparently cleared any lingering inquiries into current Chair Powell. Powell indicated he would pass the chair to Warsh but remain on until he was truly satisfied that the “investigation” was closed. Money markets, for their part, mostly shrugged at the Fed’s internal drama. The central bank’s message was clear: war or no war, the easing cycle is delayed, not dead. The Fed won’t cut rates until inflation convincingly cools and a new leadership (likely Warsh by mid-year) finds its footing. So, for now, cash investors can count on the same overnight rates—just with a dash more uncertainty.

No news is good news

If March was a hurricane, April felt like the uneasy calm that follows. US Treasury yields rose over the month. After spiking in the war’s initial fury, the 2-year Treasury yields roamed around 3.80% before popping higher after the Fed’s hawkish hold.

Investment-grade spreads, which had ballooned on war fears, steadily tightened as the conflict’s worst-case scenarios looked less likely (and as investors remembered that high short-term yields can be pretty tempting).

Short-term rates like Secured Overnight Financing Rate (SOFR) stayed well-behaved and liquid. It turns out an overabundance of cash (thanks to tax payments and limited Treasury bill issuance) can be as much a talking point as a shortage. In plain English: funding markets had a “no news is good news” month.

Bills tighten, supply returns

April’s US Treasury Tax revenue is rolling in; the Treasury is expected to pay down nearly $300 billion in T-bill supply. Repo rates did trade softer (lower yields) over the month, and T-Bills caught a bid. But don’t get discouraged if you are looking for yield. The US Treasury is expected to need new cash this month and we are expecting net new supply before the month is over. Meanwhile, corporate issuance ticked up as companies gingerly returned to borrowing after pausing during last month’s upheaval. There were plenty of willing buyers among cash investors flush with those aforementioned inflows.

Extend modestly, stay nimble

Our cash strategies navigated April’s crosscurrents with cautious optimism. The shock of war had prompted us to adopt a defensive crouch in March, but as war headlines calmed early this month and money market conditions stabilized, we felt confident tiptoeing back out along the curve in our credit strategies. Ample flows gave us dry powder to put to work, so we selectively extended to lock in yields that spiked during the conflict. It’s a delicate balance: we want to take advantage of juicy front-end rates and modestly tighter spreads, but with one eye on the door in case the conflict reignites or the inflation narrative deteriorates. Put simply, we’re clipping attractive yields while they last, yet prepared to pivot should “Act II” of war chaos come roaring back.

Conclusion

April offered a tentative “breather” for US money markets, as conflict chaos moderated and central bankers held their fire (in more ways than one). Yields remain generous, inflation is the stubborn villain that hasn’t left the stage, and the Fed is in wait-and-watch mode. Yet markets seem to have regained a bit of their chill. As we head into May, the mood is one of cautious optimism—emphasis on cautious. After all, we know how quickly things can change: if April taught us anything, it’s to enjoy the calm while it lasts, but don’t dare unpack the storm shelter just yet.