It's starting to look like the 'taper tantrum' all over again

Bond markets are panicking again.

In a note on Friday, Bank of America Merrill Lynch strategists wrote that this week, outflows in fixed income (i.e. the bond markets) were the biggest since the so-called taper tantrum of 2013.

During the taper tantrum, government bonds tumbled after then-Federal Reserve chairman Ben Bernanke indicated that the central bank's bond buying program - or quantitative easing - was coming to an end.

The strategists note that the Greek debt crisis, the spike in German bund yields, and concerns about higher US interest rates have driven the outflows.

Here's BofAML with the details:

"High grade credit funds suffered their biggest outflow this year, and double the previous week (and also the biggest since June 2013). High yield outflows also jumped to $1.1bn, the biggest since the start of the year. However, government bond funds suffered the most amid the recent spike in volatility, with outflows surging to the highest weekly number on record ($2.7bn). This brings the total outflow from fixed income funds to almost $6bn over the last week, the highest since the Taper Tantrum and the third highest outflow ever."

This is already on the Fed's radar.

In its May monetary policy update, the Fed voiced concern about volatility in the bond market as it prepares to raise rates. The Fed wrote that yields could rise as term premiums spike "in a manner similar to the increase observed in the spring and summer of 2013."

On Wednesday, the Fed reiterated that it expects to raise interest rates sometime this year, and it is glued to the incoming economic data.

And investors are getting ready.

Here's BofAML's chart showing outflows from fixed income securities: