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The Weekly Fix: Taper Talk Flattens Curve as Virus Rally Wanes

Janet Yellen, U.S. Treasury secretary, and Jerome Powell, chairman of the U.S. Federal Reserve, left, listen during a House Financial Committee hearing in Washington, D.C., U.S., on Wednesday, Dec. 1, 2021. Stocks slid, short-term interest rates rose and measures of equity volatility surged Tuesday after the central bank chairman warned Congress that elevated inflation could justify ending asset purchases sooner than planned.
Janet Yellen, U.S. Treasury secretary, and Jerome Powell, chairman of the U.S. Federal Reserve, left, listen during a House Financial Committee hearing in Washington, D.C., U.S., on Wednesday, Dec. 1, 2021. Stocks slid, short-term interest rates rose and measures of equity volatility surged Tuesday after the central bank chairman warned Congress that elevated inflation could justify ending asset purchases sooner than planned.Photographer: Al Drago/Bloomberg

Welcome to the Weekly Fix, the newsletter where bonds always have the most fun. I’m Bloomberg’s chief rates correspondent for Asia, Garfield Reynolds.

Fed Chair Jerome Powell’s decisively hawkish pivots in front of Congress brought fresh worlds of volatility to bonds this week. Investors were whiplashed as they struggled to navigate between the Scylla of omicron-fueled virus angst and the Charybdis of U.S. policy makers signaling an eagerness to taper QE and move to hike rates.