But it hasn't. The debt market expects Greenspan will achieve a soft landing, which means corporate earnings aren't going to crash and the outlook for corporate borrowers remains positive. That's driven yields lower, which in turn has kept borrowing costs lower for companies.

Despite the weakness of the past two months, the general underlying trend for the economy is still higher. The data still point to strength in the manufacturing sector, and upcoming orders appear strong.

There's still a chance of a rate hike, you can never officially rule that out, but for the moment it appears the worst-case scenario will be an announcement of a tightening bias. I don't see that happening, but that would be the worst-case scenario.

Now I think that perception is much, much different.

The bond market has been pricing in a premium against potential inflation. They've been looking at the numbers for some time and assuming that U.S. growth has consistently been strong enough to trigger inflation, and that is not a good thing for bonds.

Higher rates will eventually reign in the market, but it will likely take additional moves for that to happen in a discernible way. Whether those moves actually come is something the market can put out of its thinking -- at least until May.

It's obvious that the U.S. economy is very strong and producing jobs at a very robust pace. Even with the relatively tame wage gains, the market is anticipating another interest rate increase from the Fed.

What the Fed may do right now is prepare the market for a switch to a tightening policy from a neutral policy, and that may happen as soon as this month. There's always been the expectation that the economy would slow and ease labor market conditions, but that doesn't seem to be happening.

There's also concern the Fed will move toward a tightening bias, perhaps as soon as this month.