US Inflation Hits 3.8% as Bond Yields Spike

April CPI reached 3.8% year over year. This is the highest reading since May 2023. The next day, PPI rose to 6.0%. This is the largest wholesale print since December 2022.

Bond markets reacted immediately to the data. The 30-year Treasury yield moved past 5%. The 10-year yield is now near 4.49%. These moves reflect rising rate expectations.

TIPS Offer Direct CPI Linkage

Treasury Inflation-Protected Securities adjust principal with CPI. Investors earn a real yield above inflation. The iShares TIPS Bond ETF manages roughly $15 billion. Its expense ratio is 0.18%.

Short-term options reduce rate sensitivity. The Vanguard Short-Term TIPS ETF has a 0.03% expense ratio. The Schwab U.S. TIPS ETF also charges 0.03%. It returned roughly 1.5% through April 2026.

Commodity ETFs Show Strong Gains

Raw material price increases flow into CPI and PPI. The Invesco Optimum Yield Diversified Commodity Strategy ETF is up roughly 30% year to date. It holds futures in energy, metals, and agriculture.

The Invesco DB Commodity Index Tracking Fund gained roughly 22% in twelve months. It issues K-1 tax forms. The iShares S&P GSCI Commodity-Indexed Trust leans heavily into energy. WTI crude is above $101 per barrel.

Short Durations Protect Bond Portfolios

Long-duration bonds face pressure as yields rise. The iShares 0-3 Month Treasury Bond ETF exceeds $85 billion in size. It yields roughly 3.9% with near-zero duration. This provides stability against rate swings.

GN markets/inflation notes that shorter-dated exposures have led recently. STIP has outperformed TIP in this environment. SGOV offers a defensive position. A blended approach can manage purchasing power.