What Bonds Are Saying

The spike in rates could be just the beginning of trouble for the bond market if inflation fears erupt

June 13, 2003 -- Friday the 13th -- will likely go down in the record books as the frothy top of one of the biggest bond-market bubbles in modern American finance. In the weeks since, the abrupt sell-off in government bonds has caused interest rates to shoot up a full percentage point, to above 4% on 10-year Treasury notes. "We saw the generational low," says David R. Kotok, president of Cumberland Advisors Inc., a money manager in Vineland, N.J.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.