Financial markets should start bracing themselves for a less dovish Fed

There is more than just inflation behind the recent, substantial rise in US interest rates. This may well prove to be a real inflection point.

Could investors already be sensing that the Federal Reserve - the almighty US central bank - is changing its tune? Ever since the financial meltdown in 2008, the Fed has been unfailingly cutting interest rates and buying a variety of US government debt instruments in an effort to shore up the American - and global - economy. And it is done so even more markedly to deal with the fallout from the Covid-19 pandemic. Under the guidance of current Chairman Jerome Powell, the bank has unquestionably been pursuing the most dovish policy in its history. Bond yields soar as expected rate hi...