Dollar Surges as Yields Rise Amid Energy Price Spike and Hawkish Fed

US Treasury yields have risen due to high energy prices exceeding $100 a barrel and hawkish comments from Federal Reserve officials.

This has led to an increase in the dollar index, with multi-month highs near 106, pushing long-dollar structures into profitability.

The US national debt recently surpassed $35 trillion, and the massive supply of Treasury Notes, which make up about 52% of marketable government debt, will keep yields elevated.

Rising borrowing costs may eventually crush economic growth, triggering a potential pivot in Fed sentiment and a subsequent relief rally in Treasury bonds.