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Understanding the effect of bond market sales to the correlation of the $USD show the underlying strength of the market.  Geopolitical relations with foreign nations have historically strengthened the bond market with foreign investors interested in investing in the value of the American market. 

The fixed-income market is undergoing a painful sell-off driven by surging energy prices and hotter-than-expected producer inflation data. Because bond prices move inversely to interest rates, this yield spike caused a steep drop in bond valuations. Investors are now pricing out previous rate-cut expectations, with the 10-year Treasury yield hitting 15-month highs of roughly 4.6%. Incoming Fed leadership under Kevin Warsh has further stoked investor anxiety due to his prior resistance to balance sheet expansion. This "higher-for-longer" interest rate environment poses distinct risks to overextended equity valuations.

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