Don't Celebrate Collapsing Commodities And Yield Curves

From what I gather, there’s a lot of bullish optimism building that the collapse in commodity prices and drop in bond yields is something to be celebrated. The breakout in the U.S. dollar tells us it is not. The dollar’s been the most reliable indicator of inflation-driven stress in the U.S. economy since June 2021, when it reversed higher on hawkish language from former Federal Reserve Vice Chair Richard Clarida. That was the first clear sign that the Fed was falling behind the curve and would have to act sooner than had been signaled up to that point. Most investors missed the significance of this event because they were too focused on the slide in bond yields at the time, misinterpreting that move as ... Full story available on