FORTUNE — Over the past year, bond markets have chafed at the the prospect of the Federal Reserve slowing its purchases of government debt and mortgage-backed securities, to the point that the ensuing sell-offs were dubbed “taper tantrums.”

Indeed, one can tell just how reviled the taper had been in bond markets by the fact that yields on 10-year treasuries leapt more than 40% from June 2013 — when Fed officials began to hint at the removal of stimulus — to the end of the year.


Even more worrying to Fed officials at the time was that the market also began to expect future short-term interest rates to rise much more quickly than the Fed itself said they would. And given the fact that the Fed normally sets short term rates more or less by dictate, the divergence between the Fed and the market’s predicted paths of short-term interest rates signaled a serious failure to communicate.

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Fast forward to May 2014, however, and the situation has reversed. During 2014, 10-year treasury yields have fallen more than 10%, while expectations for future short-term interest rates have fallen to the point that markets now predict rates at the end of 2016 will be lower than the official Fed median projections.

What explains this shift? Jim O’Sullivan, chief economist at High Frequency Economics, pointed to two factors in a note to clients on Monday:

1. Slower expected economic growth

“To some extent, the implicit marking down of the long-term neutral funds rate likely reflects lowered expectations for the potential growth rate, consistent with much of the decline in the labor force participation rate reflecting structural rather than cyclical forces.”

Add to this a very weak report on first-quarter economic growth from the Commerce Department last month, and it’s reasonable to think the fall in yields in 2014 can be attributed to slower expected growth going forward. Slower growth means less profitable opportunites for investment and more reason to keep your money in safe U.S. government debt.

2. The Fed’s messaging is starting to work

O’Sullivan doesn’t think slower growth expectations tell the whole, or even most, of the story. He writes that the bond market is likely “being influenced by, and perhaps, over-extrapolating, the argument of many Fed officials that lingering post-crisis headwinds” will keep short-term rates low for some time.

If true, this is great news for the Fed, which has been increasingly relying on statements about intended future policy to strengthen its ability to goose the economy in troubled times. The Fed’s setting of short-term interest rates has a huge effect on short-term decisions, but communicating where interests rates will be over the long term could help consumers and businesses be more confident about their long-term plans.

Last year, it looked as if the Fed’s attempt to clarify its long-term plans was simply confusing the market. Today, it looks more like the market is getting the message.