Institution: The operating environment of the Federal Reserve is more similar to the 1990s than the period after the global economic crisis.

T. Rowe Price believes that as the actual economic growth and inflation accelerate year by year, the Federal Reserve must adopt a more responsive policy. Adam Marden, co-portfolio manager of the company's Dynamic Global Bond Strategy, wrote in a report that we believe the Fed's current operating environment is more similar to the 1990s and early 2000s than the period after the global financial crisis. The Fed is reducing forward guidance and relying more on data, which should lead to increased interest rate volatility. Ultimately, volatility may increase as the nominal growth rate rises. Recent interest rate trends appear to be largely driven by market positioning adjustments; for the bond market, the more important issue may not necessarily be the next CPI data, but rather the manufacturing cycle and its impact on nominal growth.