If rates rise quickly, bond prices could fall sharply and cash could start to earn higher yields.
Further, equities have been weakening and bond prices have been strengthening, he pointed out.
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Similarly, not long ago many bond market gurus were predicting the end of high bond prices.
This set off a spiral of falling bond prices, weakening banks and slowing growth.
And only one in five knew that when interest rates rise, bond prices fall.
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As falling confidence causes bond prices to fall, interest rates become exorbitant and destroy equity valuations.
The problem is that as interest rates go up, bond prices fall in value.
Bond prices are slowly falling as a result lifting yields back above 3.5% as they go.
Italy's FTSE MIB index slid 0.7%, and the country's government bond prices fell, pushing yields higher.
They are driving up bond prices on Brazilian debt in a never ending search for yield.
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Interest rates can come back up and hurt bond prices in at least 2 ways.
Meanwhile Irish eyes were doing anything but smiling as sellers tore a strip off bond prices.
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The move up in bond prices and down in yield lifted all boats across all sectors.
On Monday bond prices advanced as investors feel the doves will win the day.
In the European afternoon government bond prices suddenly turned around with ECB support suspected.
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Fed Chairman Ben Bernanke pledged to lower bond yields (raise bond prices) back in August.
Rising bond prices have brought yields down by three percentage points over the past few months.
That means there is less potential for gains in bond prices in these countries.
Bond prices have also been the direct beneficiary of massive bond-buying by central banks.
These consensus views might prove too optimistic on stock prices and too pessimistic on bond prices.
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But they would also harm the asset side of insurers' balance sheets, as bond prices fell.
Over the years, the relationship between share prices and bond prices has gone in phases.
Purists will protest that bond prices, like all prices, are set at the margin.
But none of these factors, even if taken together, explains the fall in corporate-bond prices.
Spain's bond prices began to wobble as investors worried that other countries might also face debt restructuring.
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When the Dow declines over 470 points in a day, U.S. bond prices rise by nearly 1%.
That there has been much gnashing of teeth about upwardly mobile bond prices lately is beyond doubt.
Morgan Asia Credit Index, which tracks government- and corporate-bond prices in the region, rose 14% this year.
The obvious downside is that interest rates could move higher sooner rather than later, hurting bond prices.
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Bond prices rose sending the benchmark yield on government data lower by five basis points to 5.52%.
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