The Past Weeks Odd Movements

Since the recession began there have been certain up/down relationships between several markets. For example, when the Dow Jones went DOWN, the dollar usually went UP. When the Dow Jones went DOWN, crude oil went DOWN. When the dollar went UP, bond rates went DOWN. Most of these movements were explained by pointing out they are "protectionist plays." When the Dow Jones went down, fear made investors seek the safety of the dollar thus raising demand and therefore the value of the dollar.

But!, over the last two weeks these relationships seem to be changing. At the end of last week the Dow Jones skyrocketed up several hundred points. Instead of the dollar and oil decreasing and bond rates going down, the opposite happened. Crude oil has decreased slightly, the dollar has appreciated in value and bond rates have remained unchanged.

The Bernanke Files will be watching this turn of events very closely. While still in the early stages, these changes could signify growth, but also the emergence of inflation risks. The Bernanke Files will keep you updated on this trend as events unfold.