High bond yields and a strong dollar could be here for longer, as policy conditions mirror the 1980s, Bank of America says

• The mix of loose fiscal policy and tight monetary policy looks similar to the 1980s, BofA said. 
• In that decade, those circumstances led to high yields and a strong dollar, similar to what's occurring today. 
• Reversing globalization and US asset exceptionalism will continue supporting high levels.

The recent spike in Treasury yields and the dollar's exceptional strength may point to trends that are here to stay, Bank of America said in a Thursday note.

That's if history is any indication. 

In tracing the market's past patterns, the report notes that recent fiscal and monetary policy have both moved similarly to the 1980s. Specifically, stimulus from the pandemic, followed by sudden Federal Reserve hawkishness, is in line with trends seen 40 years ago.