Bonds may not be a good idea right now. Now that the GOP finally revealed their hypocrisy and gave up the austerity/balanced budget rhetoric (just check google trends for “balanced budget” for proof), market suddenly seems to be much more optimistic about growth prospects of the economy. Fed funds futures now forecast a better than 50% chance of a rate hike by November 2011. The only way this hike is going to happen is if the recovery goes into overdrive (we’re talking 8-10% GDP growth in 2011) and unemployment falls below 8% by the end of the year. This should be a good time to be in stocks.
