About this issue
Prices of risky assets rallied between end-November and late February as the outlook for economic growth appeared to improve, while implied volatilities remained near record lows. In this environment, yields rose in major government bond markets, and perceptions grew among investors that monetary policy might turn out to be tighter in the foreseeable future than previously expected. In the United States, data releases indicated surprising strength in the economy, in particular during the first half of the period under review, leading to subsiding expectations among investors of a near-term lowering of policy rates by the Federal Reserve.