Increasing interest rates

The steepest yield curve on record is quite an accomplishment. It basically means that those with their money at risk think that inflation will be increasing.

The stock market is watching the bond market, wary a spike in interest rates will derail a fragile economic recovery and snuff the market's rally.

Stocks tumbled Wednesday, but the real drama was in Treasurys and mortgages.

A selling spree in Treasurys pushed rates higher, taking the yield curve to its steepest on record as spreads between the 2-year and 10-year widened by over a dozen basis points on Wednesday alone.

The 10-year saw its yield move above 3.70 percent, after trading at 3.55 percent the previous day. The selling wave hit bonds shortly after 1 p.m., even after the auction of $35 billion in 5-year notes was well received. . . . .