On Thursday, in “The Hurdle Is Lower And The Risk Of A Central Bank F***kup Is Higher – Sound Good?,” we said the following about the rapid rise in DM yields we’ve seen since Mario Draghi tipped the first domino in Sintra late last month:

To be sure, there’s something comical about the juxtaposition between this idea that DM central bankers are trying their best to “carefully” telegraph an exit from crisis-era policies and the hair-on-fire, mad dash to coordinate a hawkish message that we’ve witnessed since Draghi’s comments in Portugal on June 27.

As noted, they’re trying to micromanage this by the hour (that’s the “careful” telegraphing) but really, you need only look at a one-month chart of DM bond yields to see why it’s tempting to call this a rather ham-handed effort:

So far, that hasn’t translated into the kind of equity weakness you might imagine would accompany a “tantrum” but the jury is still out – remember, this has only been going on for three weeks. That is, try to extrapolate from that chart what yields are going to look like in a year if they don’t figure out how to get the messaging “right.”

The point there was simply to dispel this notion that just because rates are still low by historical standards, doesn’t mean what we’ve seen over the past three weeks hasn’t been dramatic.

The last bolded bit in the excerpted passages above is key. If this is what happened as a result of some jawboning and a rate hike from a central bank no one cares about (sorry Luke), then imagine what’s going to happen when the ECB starts unwinding and the Fed starts tapering the balance sheet. It’s a recipe for rolling tantrums.

Well, in a testament to the above, consider the following out Friday evening from Deutsche Bank’s Oleg Melentyev who notes “the limit is near” for policy normalization (also note that Melentyev underscores a point we’ve been pounding the table on for months – namely that credit refuses to respond to anything and has remained resilient throughout the rates mini-tantrum) …