      It is clear that, in this example, a negative correlation existsbetween the Airline sector and the Oil sector. Stepping outside of theworld of equities, a war in the Middle East might also spark fears ofinflation. Because oil is one of our nation's base commodities, a prolongedincrease in oil prices will eventually seep into every comer of oureconomy. If the cost of base commodities increases, the long-term resultwill be higher prices, or inflation. When inflation rears its ugly head,the Federal Reserve will raise interest rates to cool off the economy. Wheninterest rates rise, bond prices will fall. Therefore, it can be said thata prolonged increase in oil prices may spark a decrease in bond prices.