That’s the fear, as the dollar falls today despite a renewed surge in US bond yields.
Rising yields are a two-edged sword, supportive of the greenback from an interest rate differential perspective but a drag on US fiscal policy as funding costs rise, further widening deficits.
US equities have not caught the deficit flu that the dollar appears to have succumbed to, rising to their highest levels since June of 2008, when the S&P still included Lehman Brothers and Merrill Lynch….
US 10-year notes yield 2.35%, at writing.
