I have been very bearish on U.S. bonds over the past month or so. I believe the "rate trade" is in its early stages and I believe that as the Fed lessens new bond buying, we could see a good sized sell-off in U.S. bond futures. Today, the bonds have retraced a bit of their recent down move on Yellen's talk on inflation and the economy. It's interesting because she said nothing close to this just a month ago!

I believe today's retracement higher is giving bears good prices to be more bearish.