Column: Amy Falls

Markets are ignoring the likelihood of rate rises in the US. But inflation, dollar weakness and private equity exuberance may herald the sudden return of interest rate risk

The last thing the world needs is another Fed watcher. Not only are there lots of them but interest rate forecasting may be one of the most humbling exercises of the dismal science. Nevertheless, one is struck by the incredible declines in implied volatility across interest rate markets globally. The market appears to have forgotten about interest rate risk with virtually no policy moves priced in the US and no volatility priced in anywhere.

There are three forces that could bring interest rate