At its December meeting, the central bank also committed to keep buying bonds at the rate of at least $120bn a month until substantial progress had been made in respect of the economic recovery. Given Bostic’s remarks earlier this month it will be interesting to note if he has changed his tune on that. This apparent change of tack by Bostic, as well as some slightly less dovish language from other members, helped push US 10-year yields back above 1%, well above where they were when the Fed last met. The comments also helped in steepening up the yield curve, however Fed chief Jay Powell, along with vice chair Richard Clarida, quickly stamped down on these concerns with some soothing words, dragging yields off their peaks. Nonetheless this sharp spike in US yields speaks to wider market concerns about the so-called reflation trade, and the fact that inflation expectations are much higher now than they were a year ago. Fed officials will need to be very wary of creating a situation where markets start to price in a taper tantrum if the US central bank is seen to be preparing the ground for a potential tightening of monetary policy, which markets may start to price in, if US data starts to surprise to the upside.