Surge in Bond Yields Is Spilling Over to the Dollar Phil Serafino Greenback index is having biggest monthly gain since June. One spillover effect from the Fed’s attempt to tame inflation and the resulting surge in bond yields: The dollar is having a great run. The Bloomberg Dollar Spot Index’s 1.9% gain this month is its biggest since June.

The war in Iran has kept energy prices elevated and pushed Treasury yields up, with the 30-year reaching the highest level since 2002. Fed Chair Kevin Warsh ignited a fresh move higher in yields when he vowed in August to bring inflation down. Those yields are starting to look appealing to some investors, pulling money into US assets.

Traders are now watching the September jobs report set for Friday, which will test aggressive monetary tightening bets. Today, the US releases the personal consumption expenditures price index, the Fed’s preferred measure of inflation.“US data surprises are the directional signal for the dollar in the near term,” said Jayati Bharadwaj at TD Securities.—Anya Andrianova Our daily word puzzle with a plot twist. Today’s clue is: Electronic folder? Play now! Please share your thoughts on how we’re doing and what we’re missing.

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