In February 1983 your correspondent bought his first house with a 13% 30-year fixed rate mortgage. Why fixed? Because the year before, the 30-year had soared to almost 18%. Higher interest rates were a fact of life. We stubbornly stuck to the fixed rate option in succeeding refis over the next two decades.

Since the Volcker Shock of 1980 wrung inflation out of the US economy, interest rates have declined. That trend favored generations of bond investors (see our Chart of the Week). “It’s been a wind at our back for a long time,” one top credit investor told Bloomberg. “We don’t have the wind in our face yet. This is what the conversation on inflation is really about.”

Bond values are threatened in the new world order. Long-term interest rate fears, propelled by pent-up consumerism and an almost $2 trillion stimulus package, are clashing with the Fed’s dovish jawboning around relaxed inflation vigilance.