Hello, YieldAlley readers! In this issue:
Should You Lock In a Longer CD or Stick With Short-Term Rates?
AI Disruption Fears and Hot Producer Prices Weigh on Stocks as 10-Year Yield Drops Below 4%
Capital One 360 Checking: Earn $300 With Two Direct Deposits
The 25 Best Countries to Retire in 2025
And more!
NEWS
Standout Stories
📉 Retail investors have the worst trading record (Morningstar)
😔 Why pessimists make more money (Klement)
🧠 THE 2028 GLOBAL INTELLIGENCE CRISIS (Citrini)
🤖 AI Adopters: Beneficiaries of the Boom (Sparkline)
👨💻 All of the Jobs That No Longer Exist (A Wealth of Common Sense)
MARKET THOUGHTS
AI Disruption Fears and Hot Producer Prices Weigh on Stocks as 10-Year Yield Drops Below 4%
ECONOMY
Producer price inflation unexpectedly accelerated in January, with the headline PPI rising 0.5% month over month, ahead of estimates for a 0.3% increase and up from December's 0.4% reading. Services prices drove the upside, jumping 0.8% for the month, the largest increase since July 2025. On an annual basis, PPI inflation came in at 2.9%. Factory orders fell 0.7% in December after a 2.7% gain in the prior month, dragged down by a sharp decline in commercial aircraft bookings. The Conference Board's Consumer Confidence Index edged up 2.2 points to 91.2 in February, partially reflecting less pessimistic expectations about future business and labor market conditions, though the reading remains well below its four-year peak of 112.8 set in November 2024. Initial jobless claims for the week ended February 21 totaled 212,000, roughly in line with estimates, while continuing claims declined by 31,000 to 1.833 million.
STOCKS
Major U.S. indexes declined for the week, pressured by concerns about AI-driven disruption and heightened tariff uncertainty. The Dow Jones Industrial Average led losses, shedding 1.31% to close at 43,977.92, while the Nasdaq Composite fell roughly 0.95% to 22,668.21 and the S&P 500 held up best but still lost 0.44% to finish at 6,878.88. Equities sold off sharply on Monday after a widely circulated research report amplified worries about AI disruption risks across industries, and sentiment failed to recover even as NVIDIA posted consensus-beating quarterly earnings midweek. Small caps and midcaps also retreated, with the Russell 2000 dropping 1.18% to 2,632.37 and the S&P MidCap 400 losing 0.88% to 3,575.27. Year to date, the Nasdaq is now in negative territory at -2.47%, while midcaps (+8.17%) and small caps (+6.06%) continue to lead.
FIXED INCOME
The broadly risk-off tone in equities supported Treasuries, which posted positive returns as yields finished the week lower. The yield on the benchmark 10-year U.S. Treasury note dropped below 4% for the first time since November, reflecting a flight to safety amid stock market weakness. Investment-grade corporate bonds underperformed Treasuries but still posted modest gains, with the market absorbing meaningful new supply while navigating AI-related volatility and tariff headlines. High yield bond performance was mixed across sectors, as software and AI-related names saw elevated volatility while investors generally favored higher-quality credits. The divergence between risk-on and risk-off assets underscored the market's cautious positioning heading into March.
INCOME BUILDING TIP
With the 10-Year Below 4%, Should You Lock In a Longer CD or Stick With Short-Term Rates?
The 10-year Treasury yield dropped below 4% this week for the first time since November. That's a psychological milestone, but the bond market has been pricing in lower rates for a while now. The yield curve reflects an expectation that the Fed will continue cutting, which means the rates you see today on brokered CDs and Treasury ETFs may not be around six months from now.
So what do you do with your cash? If you're rolling 6-month brokered CDs (currently around 3.8% at most major brokerages) or holding ultra-short Treasury ETFs like SGOV or BIL, you have a decision to make. Stay short and you keep flexibility, but you risk reinvesting at lower rates each time you roll. Extend into a longer-term brokered CD and you lock in today's rate, but you give up liquidity and you're betting rates won’t bounce back up. With PPI inflation coming in hot this week at 2.9% annually, that's not a guarantee either way.
One framework worth knowing if you're thinking about your overall allocation: the Rule of 120. Subtract your age from 120, and that's roughly the percentage of your portfolio that belongs in stocks. The rest goes to fixed income. A 40-year-old might target 80/20. A 60-year-old, 60/40. It evolved from the Rule of 100 in the 1990s as lifespans got longer, and it's not a rigid formula (adjust for your risk tolerance, other income, how well you sleep at night), but it's a useful gut check for whether you're holding enough fixed income to begin with. If you're underweight, a falling rate environment is your nudge to act before yields move lower.
The bottom line: nobody knows where rates go from here. But checking what your brokerage is offering across maturities, comparing 6-month vs. 12-month vs. 18-month brokered CDs, and deciding based on when you actually need the cash is always the right move.
INCOME BUILDING
Cash Rates
Government Money Market Funds (7-Day Yields)
SNVXX (Schwab Government Money Fund - Investor Shares): 3.39%
SPAXX (Fidelity Government Money Market Fund): 3.32%
TTTXX (BlackRock Liquidity Funds: Treasury Trust - Institutional Class): 3.55%
VMFXX (Federal Money Market Fund): 3.59%
Brokered CD Rates (6-Month Rate)
Charles Schwab: 3.79%
E*Trade: —
Fidelity: 3.75%
Merrill Edge and Merrill Lynch: —
Vanguard: 3.80%
ETFs (30-Day Yields)
SGOV (iShares 0-3 Month Treasury Bond ETF): 3.54%
BIL (SPDR Bloomberg 1-3 Month T-Bill ETF): 3.46%
USFR (WisdomTree Floating Rate Treasury Fund): 3.57%
TFLO (iShares Treasury Floating Rate Bond ETF): 3.57%
DEALS AND BONUSES
Capital One 360 Checking: Earn $300 With Two Direct Deposits
Capital One is running a nationwide $300 bonus on its no-fee 360 Checking account. The requirements are straightforward: two direct deposits of $500+ within 75 days. No monthly fees, no minimum balance, and only a soft pull to open.
Offer Details
Main promotion: $300 bonus for new 360 Checking account
Promo code: OFFER300
Valid dates: No listed expiration
Funding requirements: Set up and receive at least 2 qualifying direct deposits of $500+ within 75 days of account opening
Bonus payout: Assessed after the first 75 days, can take up to 60 additional days to process
Eligibility: Cannot have held a 360 Checking, Simply Checking, or Total Control Checking account (primary or secondary) on or after January 1, 2024
Credit inquiry: Soft pull
Monthly fee: None
Early closing fee: None (but account must be open and in good standing to receive bonus)
Our Thoughts
This is a solid, low-friction checking bonus. Two direct deposits of $500 is easy to hit with a single paycheck cycle, and the no-fee structure means you can park the account without worrying about maintenance charges. The main downside is the payout timeline, which could stretch to 135 days (75-day qualification window plus up to 60 days processing). If you've opened a Capital One checking account since January 2024, you're out of luck, but for everyone else this is an easy $300 with minimal effort.
Picture of the Week
