Central banks responded differently to the sharp rise in inflation during 2022. For example, while the Fed raised rates by 75 bps to 1.75 percent in mid-June, the Bank of England opted for a more gradual approach, raising its benchmark rate by just 25 bps to 1.25 percent. Exhibit 13 compares one-year US Treasury strip rates (r_USD) from the prior example to UK gilt strip rates (rGBP) over the same time frame: