A Fundamental Shift in the US Yield Curve

It's the first time this year that the US Dollar index is depreciating during a flattening of the curve, represented by a blue rectangle (yellow rectangles show the flattening of the curve not altering USD value), as recently reported by a Morgan Stanley paper. It implies a slowdown in US capital inflows, and the curve being a more accurate reflection of a decrease in demand for credit and growing signs that higher supply of capital via more savings is underway. If this trend continues, we should expect the flattening of the curve to potentially act as a more accurate indicator of the future direction of the US economy and the USD.