Commentators point to a global as well as US resurgence of COVID-19 infections, driven by new variants which appear to be more contagious. The main fear seems to be slower growth caused by a combination of new health restrictions and higher inflation that forces the
Many commentators are fixated on the Federal Reserve, and make convoluted comparisons to the 2013 taper tantrum. Only this time, they say, investors are anticipating the decline in yields that came when the Fed started reducing its bond purchases and already have the tantrum spike
Break-even inflation rates, derived from the yield difference between conventional and inflation-indexed Treasuries, peaked in May and have declined since then. The two-year break-even rate was the highest at the peak, nearing 3%, followed by the five-year break-even and the 10-year, which barely crested 2.5%.