Markets are complex. They aggregate millions of individual decisions, each responding to an economic environment that is wickedly complicated. People, by contrast, seek simplicity. We search for patterns, and insist that life is made up of stories with beginnings, middles and ends. We often see patterns that are not even there.

At the moment, there is an extremely simple, compelling and popular narrative about the US bond market. It goes something like this:

In 2017 we had a year of synchronised global economic growth, and the US followed the global pattern. This year, the US economy will be further stimulated by a large, deficit-funded tax cut. Unemployment is already low. Before much longer, therefore, wage growth will awaken from its long slumber. Inflation expectations and, in turn, actual inflation will follow. This will keep the Federal Reserve wedded to its plan of raising rates three times this year. At the same time, the Fed will continue to reduce its bond holdings, unwinding the quantitative easing programme. Resurgent inflation, higher short rates and less government purchasing of long bonds will end the longest-standing cyclical trend in finance: the 37-year bull market in bonds.