Summary: A rapid U-turn in government-bond markets has sparked deep losses for some of Wall Streets biggest investors, a stark demonstration of how even small shifts in expectations for economic growth and central-bank policy can upend the most carefully laid bets. Behind the losses are recent abrupt moves in government-bond prices. With central banks signaling plans to end their extraordinary stimulus measures, short-term bonds have tumbled in price, sending yieldswhich rise when prices fallto touch their highest levels since March 2020. At the same time, yields on longer-term bonds, which tend to fall when investors expect slowing growth, have retreated from near their highs for the year.

Questions:

1. According to the article, how were selected fund managers "caught offsides" by recent moves in the bond market.
2. Explain what a "steepening" of the yield curve means and why investors were anticipating it.
3. According to the article, what do bond prices say about the market's inflation expectations?
4. According to the article, what do recent, relative changes in short- and long-term bond prices suggest about investors' expectations for inflation, Fed actions, and the economy?