Academy's Peter Tchir said that “the 10-year yield might attract all the attention but higher short-term yields are more problematic.” He added that “consumers who want to purchase large items are faced with higher costs.

Investors can allocate to less risky bonds and out of dividend stocks and still get some yield.”  Jefferies economist Thomas Simons said that “it's absurd that everyone is falling all over themselves talking about the 10-year at 3 percent,” said “how about the one-year bill at 2.20?” Now, completing the trifecta of warnings that it is not the 10Y but the 2Y that is far more worrying, is DataTrek's Nick Colas who writes in his latest later to subscribers that “despite all the headlines, it's not the yield on 10-year bonds we worry about most.

If I offered you a no-fee risk-free contract to deliver a 2.5% annual return on the S&P over the next two years, would you take it.

That is the sales pitch for the 2-Year Treasury, which yields 2.49% today.

Money flow data (courtesy of www.xtf.com) for US listed exchange traded funds show there's something to this argument: Over the last month, redemptions out of US equity ETFs total $868 million.

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