BofA Explains How the Bond Rout Could Turn Into a Bloodbath

(Bloomberg) -- The good news is investors are finallyshaking off fears of economic stagnation worldwide. The bad newsis this is brutal for credit markets.

Prices on U.S. investment-grade bonds have fallen 1.1percent in the first two days of June, a pace so fast it’sreminiscent of the notes’ 5 percent selloff in two months in2013 when speculation emerged that the Federal Reserve waspoised to scale back its bond buying. Bank of America Corp.strategists see the pain deepening from here.