Even though interest rates have been rising due to concerns about an impending QE taper, the direction that rates go once QE is over is certainly debatable. That’s because over the last 4.5 years, rates have tended to rise during outright QE (not including the sterilized operation twist) and have tended to fall when QE is not in process.
This dynamic has been one of the more puzzling consequences of QE. The originally stated goal of the policy was to depress long term interest rates. However, outright purchases have had the opposite effect.
If one takes the alternative view that the point of QE was to weaken the dollar to inflate asset prices to spur economic activity, then that view would be consistent with rising rates in QE because rising rates suggest that market inflation expectations have risen under QE. But if that’s the case, then wouldn’t one expect commodity prices and inflation to be rising during QE? To the contrary, during QE3 they have not.