The long-standing link between the US dollar and US Treasury yields has been severed, leaving investors bewildered and struggling to adjust their hedging strategies. Since early April 2025, following President Trump’s implementation of new tariffs, the 10-year yield saw a significant increase from 4.16% to 4.42%. However, the dollar did not follow suit, instead experiencing a dramatic decline, losing over 4.7% against a basket of major currencies. This unprecedented break has forced traders and investors to reconsider their approaches to volatility hedging. Analysts attribute this unexpected turn of events to rising concerns about the US economy’s stability, rather than a robust growth narrative.