Commentary Most investors believe when the Federal Reserve tapers its balance sheet, it means interest rates are going to rise. Yet, something peculiar happens when the Fed reduces its monetary support for the economy, as interest rates tend to fall. At the end of quantitative easing 3 in 2014 and later in 2017, interest rates fell as the Fed reduced its asset purchases. On Wednesday, Dec. 15, Fed Chair Jerome Powell announced an accelerated pace of its current tapering program to deal with rising inflation. At the same time, investors are deeply short 10-year Treasury Notes and are short the entire Treasury curve as they bet on higher interest rates, despite history suggesting otherwise. Most investors don’t understand the bond market or why a reduction of asset purchases leads to lower, not higher Treasury yields. From the outside looking in, as most investors do, it logically makes sense Treasury yields …