In addition, the market seems to have come to the conclusion that an end to the quantitative monetary policy does not necessarily mean the start of interest rate rises.

Monetary policy is not a panacea.

Because of fears over an early end to the quantitative monetary easing policy and overrated speculation of subsequent rate increases following the policy shift, we have seen last week yields rise to levels that fully price in a 0.5 percentage point rate hike.

Domestic inflation reflects domestic monetary policy.

A good monetary policy follows inflationary expectations and not historical numbers.

The phrase 'perception is reality' is overused generally. But perception can be reality in monetary policy. The bond market doesn't act merely on what it sees. It acts on what it expects of the Fed or the government.