Sorry, I didn’t explain it right. I meant that dropping oil prices will lower the number of dollars coming in.
When oiil prices rose, Saudi and the other oil countries ended up with more dollars since oil is sold in dollars. So they needed to buy a lot more Treasuries and mortgage backed securities. The Federal Flow of Funds report shows more dollars flowing into the US during the period when oil prices were higher. Now that oil prices are falling again, there will be fewer dollars heading our way, lowering bond prices again.
