CNN Money discusses the effect of rising interest on bondfunds.

Strong economic data hammered the U.S. Treasury market last week sending interest rates higher. This came amid signs that the Bank of Japan had slowed its buying of U.S. Treasuries, putting furthur downward pressure on bond prices and upward pressures on yields.. Rates, however, are still low historically speaking. The chief economist at Daiwa Securities reports that the effects of rates are small as opposed to ones that put the economy at risk. This is due to other positive influences in the economy. If the rates keep going higher, they could pose some problems to large parts of the stock market, particullarly financials and other assets that are interest-sensitive. The impact is said to depend on the interplay of jobs and rates. Stocks could hit a wall if things do not level out.