A more flexible economic structure, a floating exchange rate and a better macroeconomic policy framework mean that the adjustment is proceeding much more smoothly than it did on some other occasions in history when the terms of trade moved by large amounts. As a result, such adjustments to monetary policy as have been required have been gradual.
Certain factors, most notably new regulations, have led to increased bond scarcity and consequently to an increased share of bonds that trade “special”, especially ahead of reporting dates.