>>29703348
Markets are attempting to front-run the Fed, again. They're testing the Fed's jawboning, again. What markets want: easy monetary policy for the foreseeable future. What the Fed promises: the same, but not because of inflation concerns; rather, because of the poor labor market conditions and the need to keep companies afloat during the economic recovery.
The problem is, the markets don't believe the Fed, and the markets are attempting to price in real inflation, as opposed to any transitory inflation caused by supply-demand imbalances. The Fed, likewise, doesn't believe the markets with respect to real inflation, because the Fed believes real inflation is created by upward pressure on wages due to continued strong labor market participation. The Fed is correct in the short-term, given the 10% real unemployment rate, but if the market's preemptive tantrums begin to threaten the economic recovery, the Fed might be forced into expanding bond purchases across the yield curve in order to minimize the threat rising rates pose to companies burdened with debt during a weakened economic recovery with uncertain prospects for improved balance sheets going forward.
TL;DR: it's the preemptive taper tantrum II, bond sell-off boogaloo. If it continues, we might see yield curve control again. You might even say that the markets are trying to force the Fed into it, under the table-like.