Hello, YieldAlley readers! In this issue:
Private Credit Funds Are Gating Withdrawals and Here's What Income Investors Should Understand
Oil Volatility and Inflation Fears Drive Third Straight Weekly Decline
X Money: $25 Bonus, 6% APY, and 3% Cash Back Metal Debit Card
Is YouTube The World's Largest Media Business?
And more!
NEWS
Standout Stories
🚙 After a big pullback for EVs, climbing gas prices are causing drivers to eye them again (Sherwood)
🦞 China’s OpenClaw Boom Is a Gold Rush for AI Companies (Wired)
📈 The 10 Best Dividend Stocks (Morningstar)
💸 IRS website visits soar with just a month left to file (Yahoo Finance)
✈️ Airfares are lifting off because of rising oil prices. These tips could save you money. (CBS)
MARKET THOUGHTS
Oil Volatility and Inflation Fears Drive Third Straight Weekly Decline
ECONOMY
The February core consumer price index rose 0.2% month over month, in line with estimates and down from 0.3% in January, while the annual rate held steady at 2.5%. Headline CPI increased 0.3% for the month and 2.4% year over year. However, the Fed's preferred inflation gauge, core personal consumption expenditures, climbed 0.4% in January, with the annual rate unexpectedly ticking up to 3.1%, the highest level since early 2024. The second estimate of fourth-quarter GDP growth was revised sharply lower to an annualized rate of 0.7%, down from the initial 1.4% reading, reflecting weaker exports, consumer spending, government spending, and investment. On the housing front, existing home sales rose 1.7% in February to a seasonally adjusted annualized rate of 4.09 million, beating estimates, with the median price edging up 0.3% year over year to $398,000 and affordability conditions improving for the eighth consecutive month. Housing starts came in at 1.487 million (SAAR), up 7.2% from December and 9.5% from a year earlier.
STOCKS
Major U.S. stock indexes declined for the third consecutive week as ongoing conflict in the Middle East and resulting oil price volatility dominated sentiment. The Dow Jones Industrial Average fell 943 points to close at 46,558.47, a weekly loss of 1.99%, while the S&P 500 dropped 107 points to 6,632.19. The S&P MidCap 400 led declines, shedding 2.03% on the week, though it remains positive year to date at 1.08%. The Nasdaq Composite held up best among the major indexes but still lost 1.26%, closing at 22,105.36 and extending its year-to-date decline to 4.89%. The Russell 2000 slipped 45 points to 2,480.06, sitting roughly flat for the year. Beyond geopolitics, heightened concerns around stress in private credit markets and ongoing trade policy developments also weighed on risk appetite.
FIXED INCOME
U.S. Treasuries generated negative returns during the week as geopolitical uncertainty, particularly around the Middle East conflict's potential impact on energy markets, and firm inflation data pushed yields higher across most maturities. Investment-grade corporate bonds underperformed Treasuries, with the week marking the second-largest week of issuance ever in the investment-grade market. High yield bonds were volatile as shifting macro headlines and energy price swings kept traders on edge. The combination of elevated supply, sticky inflation readings, and geopolitical risk premium created a challenging backdrop for fixed income broadly.
INCOME BUILDING TIP
Private Credit Funds Are Gating Withdrawals and Here's What Income Investors Should Understand
The private credit market is having its first real stress test, and the lesson for income investors is worth paying attention to even if you don't own these funds. Morgan Stanley, BlackRock, and Blackstone have all recently limited investor withdrawals from private credit funds after redemption requests surged. Morgan Stanley's North Haven Private Income Fund, for example, returned only about 46% of what investors asked to withdraw this quarter, honoring just 5% of shares outstanding per their fund documents.
The backdrop: private credit funds lend money to riskier, often private-equity-backed companies at floating rates. When the Fed was raising rates aggressively, these funds delivered 12%+ annualized returns, comparable to stocks but marketed as safer. Returns have come down but still sit above 9% annualized at most major funds. The problem isn't necessarily performance. It's that investors piled into an illiquid asset class chasing those yields, and now a combination of rising default rates (9.2% in 2025, the highest on record according to Fitch), concerns about AI disrupting software companies (which make up roughly 25% of private credit loan portfolios), and a few high-profile blowups have triggered a rush for the exits.
Most of these funds are nontraded business development companies (BDCs) or interval funds that cap quarterly redemptions at 5% of shares. That means if you want out, you may only get a fraction of your money back each quarter. On top of that, fees are steep, typically 1.25% annual management fees plus 12.5% of net investment income. When yields were north of 12%, those fees were easier to stomach. At 9%, they take a much bigger bite. And if you invested through a commission-based adviser, there's an additional 0.85% trailing fee layered on top.
The bottom line for income-focused investors: a high yield number means nothing if you can't access your money when you need it. Before chasing any investment offering significantly above-market returns, always understand the liquidity terms, the fee structure, and what happens when everyone tries to sell at once. For most people, publicly traded bonds, CDs, and high-yield savings accounts offer competitive income with full liquidity and no gating risk.
INCOME BUILDING
Cash Rates
Government Money Market Funds (7-Day Yields)
SNVXX (Schwab Government Money Fund - Investor Shares): 3.38%
SPAXX (Fidelity Government Money Market Fund): 3.30%
TTTXX (BlackRock Liquidity Funds: Treasury Trust - Institutional Class): 3.54%
VMFXX (Federal Money Market Fund): 3.58%
Brokered CD Rates (6-Month Rate)
Charles Schwab: 3.84%
E*Trade: —
Fidelity: 3.80%
Merrill Edge and Merrill Lynch: —
Vanguard: 3.85%
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): 3.58%
DEALS AND BONUSES
X Money: $25 Bonus, 6% APY, and 3% Cash Back Metal Debit Card
X (formerly Twitter) is launching a financial services platform called X Money, and the early details are turning heads. The combination of a 6% APY, 3% cash back debit card, and $25 welcome bonus makes this one of the more aggressive fintech launches we've seen, though several key details remain unclear.
Offer Details
Welcome bonus: $25
APY: 6% (appears to require direct deposit based on early screenshots, balance cap unknown)
Debit card: Metal card earning 3% cash back (category restrictions unknown)
FDIC coverage: Yes, deposits held by Cross River Bank, Member FDIC
Eligibility: Invitation-based access at launch
Key restrictions: Full terms not yet published. Balance limits, rate duration, and fee structure are all TBD.
Our Thoughts
The headline numbers are impressive if they hold up. A 6% APY would top every major high-yield savings account on the market right now, and 3% uncapped cash back on a debit card would be nearly unheard of. The big question marks are whether the 6% has a balance cap (most similar offers cap at $5,000 to $25,000) and how long the promotional rate lasts. Worth watching closely as the full terms roll out, but don't chase an invitation until we see the fine print.
Picture of the Week
