ASX200 rout - What can the 1996 inflation episode teach today? Tony Sycamore May 19, 2021 5:57 AM Last week US core CPI hit 3%, its highest level since January 1996. The very same year that I started on the floor of the Sydney Futures Exchange as a trainee bond trader for Macquarie Bank. Share: The 1996 inflation scare sent the bond market into a six-month tailspin. Yields on benchmark US 10 year bonds rose from around 5.50% to 7% by mid-1996. Not immune from the bond market rout, US equities topped out in May, before falling over 11% into mid-July. Despite concerns that inflation would continue to surge as the economy strengthened, the then Chairman of the Federal Reserve Allan Greenspan, stared down the bond market vigilantes as well as fellow board members and refused to raise official interest rates.