Traders betting on a further sustained rise in interest rates might want to listen more closely to what the US Federal Reserve is saying. There have been a lot of comparisons made in markets between recent volatility and the so-called Taper Tantrum in 2013 when rates rose sharply after the Fed signalled it might begin to scale back bond purchases. In my view, the recent rise in interest rates has been driven by a confluence of the unwinding of trade positions caught offside in the Treasury market, market illiquidity and other technical factors. It has been out of line with economic fundamentals, not been supported by changes in data on growth or inflation, the rollout of the Covid-19 vaccines or other developments. Furthermore, the rise is very much at odds with the Fed’s own policy stance and the recent statements of members of the policy-setting Federal Open Market Committee.