🚨The US Dollar and Treasury yields relationship has broken down

The way of investing has materially changed this year

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The US Dollar and the 10-year Treasury yields have moved in opposite directions over the last 2 months. The US Dollar has dropped 5% while the 10-year yield has jumped nearly 30 basis points.

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This broke the close relationship that had lasted for years.

In the past, higher yields reflected a strong performance of the US economy, which attracted foreign capital inflows into the US, making the US Dollar stronger.

This time, surging yields might also be reflecting rising investors’ concerns about the fiscal sustainability (public debt) in the US.

This simply suggests that foreign investors are moving money out of the US assets.

Implications have already been significant. Even though the S&P 500 has been flat year-to-date, for foreign investors, it has been down nearly 10% due to the decline in the US Dollar.

In other words, the way of investing has materially changed.

More on this topic in the following articles:

🚨Is the United States going to default on its public debt?

What is a Mar-a-Lago Accord and how it could reshape the global financial system?

globalmarketsinvestor.beehiiv.com/p/is-the-united-states-going-to-default-on-its-public-debt

!?️What is happening with the global government bond market?

Bond investors are in control of the financial markets - this is key to watch

globalmarketsinvestor.beehiiv.com/p/what-is-happening-with-the-global-government-bond-market

How dangerous the US debt crisis has become? Part 1/2

The US government is spending as if the economy is in a recession. What are the consequences for ordinary people, taxpayers, savers, and investors?

globalmarketsinvestor.beehiiv.com/p/how-dangerous-the-us-debt-crisis

⚠️Portfolio performance review as of May 2025

Assessment of my long-term investment portfolio as of May 2025

globalmarketsinvestor.beehiiv.com/p/portfolio-performance-review-as-of-may-2025

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