Look, I get it—this topic comes up again and again, and it can be a bit of a head scratcher.
I keep saying it: inflation is sticky, and the dollar is rolling over.
Yet people ask, "How does that work with a 75% rolling correlation between the dollar and yields recently?"
And that’s a valid question.
Check out this chart—it’s a visual reminder that correlations aren’t set in stone. There are times when the numbers move in harmony and other moments when the link just falls apart.
Markets evolve, and so do these relationships.
Here’s the honest truth: correlations are fickle by nature. They can look tight one minute and then unravel the next.
Relying on a strong historical link is like betting on a coin toss coming up heads every time—it’s risky and can easily lead you astray.
Markets evolve, and yesterday’s relationships might not hold true tomorrow. So, let’s keep the conversation open, remain flexible, and remember that in these dynamic times, nothing stays the same forever.
