Investors may start worrying that the central bank will scale back its monthly bond purchases to reduce the amount of money in the system. That will push up yields further.
Investors cannot justify buying bonds and they want to avoid 10-year yields going lower than 1.3 percent. There is a five-year note auction next week and investors don't want to have a low coupon on it.
Investors who follow the index will continue to buy longer bonds.
We can clearly see consumer prices starting to rise and investors are going to demand higher yields.
The decline in stocks yesterday was not the start of a trend. At this level investors should sell bonds.
The report will probably prompt investors to imagine the era of low rates is going change soon.