Treasuries have rallied this month, but the situation might be short-lived as options traders indicate they expect bigger price swings in bonds and declining volatility in stocks. Indexes from Barclays Capital show interest rate volatility has increased on speculation that borrowing costs will rise. "We've probably seen the great secular bull low in yields," said Mitchell Stapley, chief fixed-income officer for Fifth Third Asset Management. "The level of rates, what happens in the housing market, that's on the forefront of people's minds and why we are getting fixed-income volatility spikes that haven't made it over to the equity markets."
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