The start of the return to normalcy?

Here's the chart for long term US interest rates over the last ten years from fixedincomeinvestor.com:

The recent increase doesn't look too spectacular, interest rates are still very low in historical terms although you might fear/expect/hope that they'd go back up to three or four per cent in the next year or so.

What looks a bit more spectacular is the price of US Treasury bonds (futures price from ifsmarketcenter.com).

When interest rates go up, then bond prices go down - which has fallen by about ten per cent in the last two months. That's a heck of a loss from a supposedly safe investment:

Everybody is explaining this/blaming this on the fact that Bernanke hinted that he might slow down the pace of QE if the economy starts picking up a bit.

In other words he has not said he is going to reverse QE, he has not suggested that he will stop QE, he merely hinted that he would reduce the monthly amount of QE if x, y and z happens.

That's how fragile all this is. And with bit of luck, when America finally sneezes, Britain will catch cold and interest rates will go up to something sensible again, like 2% above inflation.