By coinnews 
00:00 Jared Blikre
Weak buck, easy ride. 2025 is ripping up the old playbook as the US dollar stopped dancing with the 10-year yield for a stretch during all the tariff turmoil. Now they’re doing the tango once again. Let’s dive into what this means for stocks and risk markets writ large. I’m Jared Blikre, host of Stocks and Translation. Well, let’s start with a chart. This is a four-year chart of the US dollar index, that’s in white, and the 10-year yield rate, and this is the US borrowing rate going out 10 years. And you can see, for the most part, they’re going in the same direction most of the time. They diverge a little bit, but if you’ll notice, they’re going up here, they’re going down here in tandem, up and down, and it proceeds until we had a little bit of a hiccup lately. So things are changing, and this is what I mean by the the new playbook. So this zooms in a little bit on the last chart. This is a one-year chart of the dollar versus the yield, and here you can clearly see this divergence. And when that happened, that was in early April, and it happened around liberation day. Suddenly yields shot up and the dollar dropped. Why would that be? Because in the old days, a dropping dollar meant risk on. Well, not in this context. In fact, the S&P 500 had some of its worst days since the early pandemic. Meanwhile, yields were shooting higher, so they were going in an opposite direction. So let’s break down what this correlation means. First of all, when I say the dollar yield correlation, I’m looking at a one-year link between the US dollar index, and this is a ticker symbol right here that you can find on the Yahoo Finance website, and the 10-year Treasury yield, and that’s a ticker right there, carrot TNX. Now, if they’re positive, that means that they’re moving together, and if they’re negative, that means they’re moving apart. And the slope matters too. So an increasing slope, as we’re seeing here in green, means that they’re moving together in an increasing way. So this truck goes all the way back four years, and we do see a little bit of a decline here in the beginning of that 2022 bear market. But early on, even as the S&P 500 in white continued to move lower, the correlation had bottomed and it started heading higher. This proceeded right into early November of 2024 last year, and guess what would happen would happen right back then. That was the Trump election. From there, from that peak, it slowly declined, but then it started accelerating in January when we started hearing more rumblings about the tariff policy. Then it took a bigger dip, came up a little bit and really sunk as liberation day and the whole world realized that they didn’t want to own US dollar assets. In fact, kind of the mantra was anything but US dollar assets. So what does this mean going forward? Well, the last few days have actually seen a resumption in that positive correlation between the 10-year yield and the US dollar index. In fact, that happened right after the Fed meeting, and we saw it enforced on Thursday, that would be last Thursday, a little bit Friday, but then Monday, yesterday was a huge day. Over the weekend, we got that big tariff detente with China, and that kind of signaled a more risk-on environment. And so we have seen the dollar moving higher, actually quite forcefully, along with US yields. And far from being risk off, the fact that they’re marching together again and the dollar higher, that means that the whole world is accepting US dollar once again. So going forward, we want to pay attention to this relationship, not just the direction of each of these assets individually.