Goodbye QE: The impact of the Fed's tapering plans

During the past two months, we have received confirmation that the Federal Reserve has a plan and a timetable to wean itself off quantitative easing (QE). Bond markets, currency markets and, latterly, equity markets have sold off – in some cases considerably. The reaction in the bond market was particularly pronounced, as 10-year US government bond yields jumped from 1.6% to 2.5% over the course of May and June, and the 10-year gilt mirrored this almost exactly (1.6% to 2.4%). If we are in the death throes of QE, what are the ramifications of such a move? From a US bond market perspec...