Week Ending: April 17, 2026

Refund Reality

In recognition of Tax Day this week in the U.S., we tracked the daily individual tax refund data released by the U.S. Treasury. Inflationistas are quick to note that year-to-date tax refunds to households are 18% higher than at the same time last year, stoking concerns that the so-called fiscal boost will reignite inflation. But context matters. When compared with other types of household income, year-to-date tax refunds of $246 billion are less than one week of aggregate U.S. consumer income from wages and salaries, which averaged over $1 trillion per month in 2026. Further, tax refunds during the 2021 fiscal boost, which led to the subsequent spike in inflation, had already exceeded $600 billion by April 2021, while the total government stimulus to households ended the year at $4.5 trillion, equivalent to over four months of wage income. So, while refunds are worth watching as they provide the most current government transfer data, historical context suggests they are far from the scale of a fiscal boost that would meaningfully fuel inflation.

Highlights of the Week:

High Yield: The high yield bond primary market was busy this week, with $7.4 billion in new issues. Despite an issuance-heavy calendar, demand helped support prices, with the market recording $2.5 billion in calls and maturities, $6.3 billion in coupon payments, and a $1.4 billion inflow. The demand technical should remain supportive, particularly with yields near 7%.

Corporates: It was a risk-on week for investment-grade (IG) corporates as investors grew more optimistic about a deal with Iran. Rates rallied, and spreads tightened one basis point to an option-adjusted spread of 79 basis points (bps), back to just one bp wider than at the start of the year. On the supply front, $58 billion was issued this week, bringing year-to-date totals to $742 billion.

Municipals: For the week ending April 15th, LSEG Lipper reported $408 million in municipal fund outflows, driven by tax-related selling, with $626 million in outflows concentrated in open-end funds, partially offset by $199 million in exchange-traded fund (ETF) inflows. Outflows were led by short-term funds of $533 million, suggesting that investors raised liquidity for tax payments rather than reducing overall exposure. Meanwhile, year-to-date inflows remain strong at $27.8 billion, the third-highest for this period on record.

Equities: The U.S. equity market rallied this week, reaching new all-time highs as easing tensions in the Middle East lifted investor sentiment. Most sectors finished the week in the green, with technology, consumer discretionary, and communications leading the way higher, while energy, utilities, and consumer staples lagged.

Securitized Products: Mortgages had a modestly positive week, outperforming Treasuries as risk assets rallied broadly, implied volatility declined, and yields edged lower. With the supply-and-demand backdrop remaining roughly balanced, flows into fixed-income mutual funds have provided market support. For the week, the 30-year conforming mortgage rate declined to 6.30%, still an affordability headwind for prospective homeowners.