At the height of the pandemic, it seemed only a matter of time before negative interest rates—the last resort of central banks—ruled global markets.

A controversial strategy that's yielded mixed results in the Eurozone and Japan, traders still piled on bets earlier this year that central banks from New Zealand to the United Kingdom, and even the United States, were destined to follow suit. The three were among those that most aggressively cut rates through the worst of the virus-induced lockdowns. Yet all ultimately stopped short of going negative.

Traders now see a sub-zero move as increasingly unlikely, with policymakers largely favoring a "new conventional" mix of bond purchases and sector-specific aid programs. Of course, trillions of dollars of debt continue to trade with negative yields, effectively guaranteeing a loss for those who hold them to maturity. But with optimism returning about global growth, bond investors are shifting their attention to bets that yields will go higher, not lower.