🔴USD hits 13-month high, bonds rise, oil crashes

USD rallies for 6 consecutive sessions, hitting a 13-month high. At the same time, long-duration US Treasury yields drop ~9bps. The two developments are interpreted as part of the same narrative, but the actual causes are separate.
DXY continues to break highs thanks to last week's hawkish shock from the Fed: 9 out of 18 Fed members forecast a rate hike in 2026. Warsh also dropped forward guidance, causing the market to reprice the probability of a year-end rate hike to ~60%.
Bonds are rising, oil prices have erased all gains since the start of the Hormuz conflict, lowering short-term inflation expectations + concerns about overvaluation of tech stocks have increased hedging demand.
Bessent yesterday commented that the Fed should abandon the dot plot, also triggering risk-off sentiment. All asset classes are being sold heavily
- Gold falls below $4,000/oz (lowest since start of year)
- Silver drops 8% during the session (55% below January peak)
- bitcoin:native drops to $59,000 (down nearly 20%).
-> Market seems to be undergoing a quarter-end de-risking rather than a single positive narrative about DXY.
The PCE data released today (June 25) will be a psychological test for the market.