In the run up to President Trump’s inauguration, global bond markets have experienced heightened volatility, as investors have priced in policy uncertainty and the potential for higher-for-longer inflation. Following the sharp rise in government yields, the past week has seen something of a relief rally in bonds, with yields lower in recent days. The US 10-year Treasury has fallen by nearly 15 basis points over the course of the week, with similar declines in UK gilt yields. The underlying theme here is bond markets are now adjusting to the relatively new environment of quantitative tightening (QT), driving heightened volatility, with central banks no longer the marginal buyer in the secondary markets.