One Thing I'm Watching: Treasury Yields Disconnect from Oil Prices

The link between oil prices and Treasury yields is fraying.

For months, Treasury yields almost always climbed when oil prices rose, reflecting worries that costlier energy would feed into overall inflation and push the Federal Reserve to raise interest rates higher than previously anticipated.

But while Middle East tensions are pushing oil prices higher today, Treasury yields are going in the opposite direction.

One reading on the shift is that investors are becoming more concerned about the economic outlook-worried that higher energy prices and steeper borrowing costs could finally slow consumer spending and curb growth.

A more benign take is that investors are simply rebalancing their portfolios, shedding some riskier assets like tech stocks in favor of bonds, given that yields are still near two-decade highs.