It was a riotous summer, the heat scorching the world from one end to the other. Many remember it for all the wrong symptoms, beginning with the so-called taper tantrum. The year 2013 was many things, and there were several consequential tantrums in the middle of it, it's just that they had nearly nothing to do with the Fed's taper.
For one thing, the sell-off in USTs and other global fixed income which began in May reversed course suspiciously quickly. According to some markets, eurodollar futures, in particular, it was over by early September. The yield curve would top out (steepest point) by November.
Nominal rates peaked at year's end. Read Full Article »