February 23, 2026View Related Post →

Stable Yields Weaker Dollar Risk Assets Correct As Gold And Commodities Surge

With the 10-year U.S. Treasury yield stabilizing just above 4% and the dollar index weakening, U.S. equities remain broadly resilient. At the same time, crypto assets like Bitcoin and Ethereum are undergoing a sharp deleveraging-driven correction amid tariff and regulatory uncertainty, while gold, silver, and oil rally as hedges against inflation and policy risk.

Weekly Macro Briefing

Macro Market Analysis – February 23, 2026

This week’s data paints a picture of "stable but elevated yields, a softer dollar, stressed crypto, and strong real assets." With the Federal Reserve on an extended pause, incoming growth and inflation data plus trade and regulatory risks are driving very different outcomes across asset classes.

Below we break it down into four pillars: (1) rates and bonds, (2) the dollar and global assets, (3) the crypto drawdown, and (4) equities and commodities.

1. Interest rates: the 10-year anchors just above 4%, real yields fall faster

  • U.S. 10-year Treasury yield: 4.08%, down modestly over 1 day and 1 week and about 5% lower over 30 days
  • 10-year TIPS real yield: 1.79%, down roughly 9% over 30 days → real yields are falling faster than nominal
  • 10Y–2Y curve spread: 0.60%, wider over 90 days → curve is slowly “un-inverting” and normalizing

Why are yields drifting lower?

Over recent weeks, January CPI and softer labor/consumption data have reinforced the view that inflation is moving closer to the Fed’s 2% target. The 10-year yield has slipped from early-February highs around 4.3% into the low 4s, reflecting a mix of inflation cooling and growth concerns. (markets.financialcontent.com)

The Fed continues to signal a “data-dependent pause,” with markets increasingly pricing the first rate cut sometime in the first half of 2026. At the same time, the U.S. Treasury faces heavy refinancing needs in 2026, which keeps a structural floor under yields even as inflation recedes. (markets.financialcontent.com)

What the curve normalization means

  • The 2-year yield sits in the mid-to-high 3s while the 10-year is in the low 4s, so the curve is less inverted than in 2023–24. (greystone.com)
  • Historically, deep inversion has been a recession warning, but today’s gradual steepening suggests a move toward normalization rather than a fresh recession signal.

Key mechanism:

  • Unlike the sharp rate shock of 2023–24, we now have high but stable-to-lower yields.
  • This is supportive for bond prices and eases some pressure on equity valuations, especially for growth stocks. But with the 10-year still above 4%, any deterioration in growth expectations can still compress valuations from a relatively demanding starting point.

2. Weaker dollar and global assets: a friendlier backdrop for EM, Europe, and Japan

  • Dollar Index (DXY): 97.56
    • -0.23% over 1 day and -0.73% over 30 days; -2.61% over 90 days → a clear downtrend despite short-term noise

Why is the dollar softening?

  1. Peak Fed narrative: Falling nominal and real yields reinforce expectations of eventual Fed cuts, eroding the dollar’s rate advantage.
  2. Growth and policy uncertainty: Ongoing debates around tariffs and regulation are encouraging investors to diversify away from the dollar into gold, other currencies, and non-U.S. assets. (vtmarkets.com)

How dollar weakness feeds into global ETFs

  • Emerging Markets ETF (VWO): +10.26% over 90 days, +2.57% over 30 days
  • Europe ETF (VGK): +12.78% over 90 days, +3.13% over 30 days
  • Japan ETF (EWJ): +16.08% over 90 days, +8.41% over 30 days

Transmission mechanism:

  • A weaker dollar reduces the real burden of dollar-denominated debt for many emerging markets.
  • For U.S.-based investors, dollar weakness boosts foreign equity returns when translated back into dollars, making VWO, VGK, EWJ, and similar funds more attractive.
  • Markets like Japan, where currency weakness, corporate reforms, and improving shareholder returns are in focus, can see outsized benefits in this environment. (financialcontent.com)

3. Crypto: deleveraging, tariffs, and regulation combine into a hard reset

  • Bitcoin (BTC): $67,622
    • -3.11% over 7 days, -24.44% over 30 days, -23.40% over 90 days
  • Ethereum (ETH): $1,957
    • -6.17% over 7 days, -33.73% over 30 days, -33.72% over 90 days

The market is now debating whether this is a full-fledged bear phase within the longer-term crypto cycle.

Recent catalysts: tariffs, regulation, and leverage washout

From late 2025 highs above $100,000, Bitcoin has dropped by nearly half. On-chain and derivatives data show that late January and early February saw massive forced deleveraging, with billions of dollars in long futures liquidated as key price levels broke. (lbank.com)

Today (February 23), fresh headlines reported Bitcoin breaking below the $65,000 support to near $64,300, triggering another wave of over $460 million in long liquidations within hours. The selling was intensified by: (money.mymotherlode.com)

  • An escalation of U.S. trade tensions after the administration moved to raise global tariffs from 10% to 15% using Trade Act Section 122; and
  • Regulatory uncertainty around digital assets as lawmakers and agencies jockey over jurisdiction and rulemaking.

How macro and policy link into crypto prices

  • Crypto assets sit at the far end of the risk spectrum.
    • When investors grow nervous about higher-for-longer inflation, tariff shocks, or policy missteps, they tend to sell long-duration, speculative exposures first—including crypto.
  • Tariffs raise the risk of re-accelerating inflation and slower global growth (a stagflation mix), a backdrop in which investors typically prefer cash-flowing equities, quality credit, and hard assets over crypto. (bizzikit.com)

In short, even as rates stabilize, crypto is working through its own deleveraging and policy-driven bear leg, somewhat decoupled from the more benign picture in traditional assets.

4. U.S. equities, bonds, and commodities: rotation beneath the surface

4.1 U.S. equity ETFs: modest pullback from highs, with style rotation

  • S&P 500 ETF (SPY): +0.80% over 7 days, -0.29% over 30 days, +2.11% over 90 days
  • Nasdaq-100 ETF (QQQ): +0.68% over 7 days, -2.68% over 30 days, -0.35% over 90 days
  • Dow Jones ETF (DIA): -0.06% over 7 days, +0.83% over 30 days, +5.32% over 90 days

Interpretation:

  1. Growth/tech valuation reset:

    • The Nasdaq’s relative underperformance over the past month reflects multiple compression in high-multiple growth and AI-related names, amid concerns about overinvestment, competitive disruption, and regulatory scrutiny. (financialcontent.com)

  2. Shift toward defensives and value:

    • The Dow’s outperformance over 90 days suggests investors are tilting toward cash-generative, dividend-paying, lower-volatility stocks, and away from the most rate-sensitive long-duration names.

4.2 Long Treasuries (TLT): direct beneficiary of lower yields

  • 20+ Year Treasury ETF (TLT): +2.20% over 30 days, +0.34% over 90 days

As the 10-year yield has slipped from its early-February highs, long-duration Treasuries have rallied. Still, persistent worries about fiscal deficits and heavy supply are encouraging investors to use TLT more as a diversifier than an all-in bet on collapsing yields. (markets.financialcontent.com)

4.3 Gold, silver, and oil: inflation and policy hedges in the spotlight

  • Gold ETF (GLD): +3.82% over 30 days, +25.10% over 90 days
  • Silver ETF (SLV): +13.54% over 7 days, -14.80% over 30 days, but a huge +69.62% over 90 days
  • Oil ETF (USO): +10.40% over 30 days, +17.89% over 90 days

Why are real assets so strong?

  1. Inflation and tariff risk:

    • Higher tariffs raise import prices and inflation risks, undermining the real value of cash and fixed coupons.
    • Investors are responding by increasing exposure to hard assets like gold, silver, and oil as hedges. (vtmarkets.com)

  2. Policy and geopolitical uncertainty:

    • Trade conflicts, geopolitical tensions, and a shifting regulatory landscape for digital assets create a premium for “policy-resilient” stores of value, with gold again playing its traditional safe-haven role.

  3. Oil’s supply–demand balance:

    • Ongoing supply constraints and still-resilient global demand help support a gradual uptrend in oil prices, feeding into the strong performance of USO.

5. Three key takeaways from today’s data

  1. Rates are “high but stable” — a near-term positive for both bonds and equities, but with lingering long-term risks.

    • A 10-year anchored just above 4%, falling real yields, and a normalizing curve all point to receding acute recession risk, even as debt and growth questions remain.

  2. A softer dollar plus strong foreign equity performance make the case for more global diversification.

    • EM, Europe, and Japan ETFs have delivered mid–high single to double-digit gains over 3 months, supported by currency and local factors.

  3. Crypto is in its own reset phase, driven by leverage, tariffs, and regulation rather than just rates.

    • Bitcoin and Ethereum’s deep drawdowns illustrate how the riskiest corner of the market reacts fastest and hardest to shifts in macro policy and risk sentiment.

In the coming weeks, further tariff and regulatory developments, Fed communication, and hard data on inflation and jobs are likely to be the main catalysts steering cross-asset performance.

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